On the emergence of cooperative industrial and labour relations

Abstract

We 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.