On the emergence of cooperative industrial and labour relations

Abstract

AbstractWe explore the long‐run determinants of current differences in the degree of co‐operative labour relations at the local level. We do this by estimating the effect of the medieval communes –that were established in certain cities in Centre‐Northern Italy towards the end of the 11th century – and that contributed to the emergence of a co‐operative attitude in the population on various proxies for current co‐operative labour relations. Conditional on a large set of firm and municipality level controls, as well as a full set of province fixed effects, we find that firms located in municipalities that had been a free medieval commune in the past have higher current probabilities to adopt two‐tier bargaining structures and to be unionized. We also report instrumental variables (IV) and propensity score estimates that confirm our main results.