BI-CEPR Workshop on 'Labour Market Policies and Institutions' - 21-22 September 2026

28 September 2026

On 21-22 September, Banca d'Italia hosted the BI-CEPR Workshop on 'Labour Market Policies and Institutions', bringing together leading scholars to discuss recent research on labour markets, firms and public policy.

The workshop explored how workers and firms respond to economic shocks and institutional changes, and the role of labour market policies in shaping these adjustments. Contributions covered a broad range of topics, including wage setting and firms' labour market power, employment protection and job displacement, job search and matching, migration, gender and family-related inequalities, and the role of firms and managers in workers' outcomes and productivity. Across these different areas, the papers combined rich administrative data with innovative empirical and structural approaches to shed light on the mechanisms shaping labour market outcomes and on the effectiveness of public policies.

The workshop also featured two keynote lectures. Erik Hurst (University of Chicago) presented research on Sticky Wage Norms and the Real Wage Cost of Unexpected Inflation. Using detailed payroll data for the United States, the study documents how firm-level norms for nominal wage increases adjusted only modestly during the recent inflationary episode. As a result, a substantial share of workers experienced persistent real wage losses, while job changes and off-cycle wage adjustments provided alternative margins through which some workers were able to respond to inflation. The analysis highlights the importance of firms' wage-setting practices for understanding the distributional consequences of unexpected inflation.

Barbara Petrongolo (University of Oxford) presented Work, Workplaces and Worker Mental Health, joint work studying the relationship between employment, firms and workers' mental health. Using matched employer-employee and health data from Denmark, the research shows that employment has sizeable positive effects on mental health and that the workplace itself matters: workers' mental-health outcomes vary systematically across firms, and transitions between workplaces provide evidence that firms can directly affect employee well-being.

Overall, the workshop highlighted the value of combining detailed microeconomic evidence with economic modelling to better understand how labour market institutions, firms and public policies affect workers' employment, earnings and well-being.