Public pension expenditure in Italy has been growing rapidly in the last three decades and is now among the highest in industrialized countries. Despite recent reforms, benefits remain generous by international standards and, unless additional measures are taken, the financial situation of the...

In this paper I address the question of whether wages are affected by current and past labor market conditions. Using microeconomic data from Italy and Spain I obtain three main results. First, the unemployment elasticity of wages is negative and significant, but much smaller than the one...