Do unions affect innovation in Italy? Evidence from firm-level data

Abstract

We study the unions-innovation correlation using micro-data on Italian non-agricultural firm. The key finding of the paper is that unionized firms have a higher and statistically significant probability of filing patents than their non-union competitors in Italy. While corroborating the evidence that unionisation does not – generally speaking – inhibit innovation in Europe (while the opposite hold true in North America), our study is the first to show that such effect is unambiguously positive in the Italian pre-crisis context and also that it is far more significant than in the rest of Europe. The result is at odds with the de-unionisation path which has characterised Italy over the last decades and thus needs to be interpreted in terms of policy suggestions.