Description:
We explore the long run determinants of current differences in the degree of cooperative labor relations at local level. We do this by estimating the causal effect of the medieval communes - that were established in certain cities in Centre-Northern Italy towards the end of the 11th century - and that contributed to the emergence of a cooperative attitude in the population on various proxies for current cooperative labor relations. Conditional on a large set of firm and municipality level controls, as well as a full set of province fixed effects, we find that firms located in municipalities that had been a free medieval commune in the past, have higher current probabilities to adopt two-tier bargaining structures and to be unionized. We also report IV and propensity score estimates that confirm our main results.