This paper studies a large place-based industrial policy (PBIP) aimed at establishing industrial clusters in Italy in the 1960s and 1970s. Combining historical archives spanning one century with administrative data and leveraging exogenous variation in government intervention, we investigate both the immediate effects of PBIP and its long-term implications for local development. We find that the policy led to agglomeration of workers and firms in the targeted areas persisting well after its termination. By promoting high-technology manufacturing, PBIP boosted demand for business services and favored the emergence of a skilled local workforce. Over time, this shifted the local economy towards high-skill industries and produced a spillover from manufacturing -- the only sector targeted by the program -- to services employment. We document a stark rise in knowledge-intensive services, which contribute significantly to the long-lasting employment effects of PBIP. Cost-benefit analysis indicates that the policy generated net gains in the long run.

Government transfers might have long-lasting consequences on electoral outcomes. We study a regional policy implemented in Italy over the second half of the twentieth century and leverage variation in transfers to show that parties promoting more state intervention in the economy performed better in the targeted areas relative to places that were not subsidized, decades after the end of the policy. This effect does not seem to mirror long-term differences in the economic performance of treated and control areas, which were small, nor other attitudes within the electorate.

This paper assesses the effects of opting out of centralized collective bargaining agreements on workers and firms. We study two opting-out events that occurred in Italy, a country with very rigid industrial relations. In the first event, firms left centralized collective bargaining agreements to reach agreements with smaller and often local unions. In the second event, a group of large employers decided to abandon their collective bargaining agreement in order to re-negotiate a new one with national unions. Drawing on a matched event-study design, we find evidence that workers experiencing opt-outs from centralized collective bargaining agreements suffer wage losses but have higher employment stability and higher earnings. Opting-out firms lower their labor costs and increase their survival probabilities. These effects are larger in firms facing stricter employment protection regulation.

This paper studies the effects of a hiring subsidy introduced in Italy in 2013 with the goal of stimulating female employment. We employ a staggered event-study design to investigate the dynamic effect of the subsidy on firm and worker outcomes, focusing in particular on hiring decisions. Results show that i) subsidized hires are more likely to remain employed at the firm in the long term, ii) firms that use the subsidy hire women with longer non-employment spells, including mothers and iii) subsidized hires are positively selected compared to the average hire at the firm. We argue that the subsidy could operate as a mechanism allowing firms to learn about the potential productivity of these female workers.

This paper studies how wage caps for public sector managers affect their labour supply decisions and the quality of public employment. We analyze a wage cap introduced in Italy in 2014, leveraging matched employer-employee data covering public and private workers. Using an event study approach, we show that public managers whose wage exceeded the cap in 2014 are more likely to move to the private sector or to retire. The reform also influenced the overall quality of managers within the public sector. Transitions towards the private sector are exclusively observed among high-quality managers, while low-quality managers tend to remain in the public sector.