Paolo Naticchioni (University of Roma Tre)
Francesco Armillei, Tito Boeri and Alan Manning
This paper provides a model in which employers choose simultaneously wages, work safety investment and a reporting policy in case of work injuries. Using the standard concentration measure, we test the model implications over employer-employee matched micro data on the universe of private firms in Italy, a country with a relatively large work injury rate, controlling not only for worker, but also firm characteristics. We also investigate the complementary and substitutability of work safety investment and wages, and decompose concentration into a component related to the number of firms and a component related to the dispersion in employment shares. Our results show that labour market concentration decreases wages as well as the incidence of reporting injuries, consistently with the predictions of the model.