National Wage Contracts, Monopsony, and Welfare in a North-South Economy,

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ID: 332902
2026
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Abstract
Abstract In countries characterized by significant geographical disparities in productivity, nationwide labour contracts may cause local unemployment by preventing the adjustments that would occur in a competitive labour market. Here we argue, however, that when there are mobility frictions and monopsony power, nationwide contracts may still be preferable to local contracts. Using a spatial general equilibrium model calibrated on the Italian North-South divide, we suggest that nationwide wage contracts may still lead to narrower regional welfare gaps if monopsony power is sufficiently strong in low-productivity areas.
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openalex_W7222941261 Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors ‪Emanuele Ciani, Alberto Dalmazzo, Guido de Blasio
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Journal journal of the european economic association
Year 2026
DOI
10.1093/jeea/jvag065
URL
https://doi.org/10.1093/jeea/jvag065
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