How Much Does Hiring and Firing Cost? Survey Evidence from a Sample of Italian Firms (original) (raw)
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Firing Costs and Job Loss: The Case of the Italian Jobs Act
Italian Economic Journal
A recent reform in the Italian labour market has modified the permanent contract by reducing firing costs. Using a discontinuity in the application of the reform, we evaluate its effect on the probability of being still employed about three and a half years later. In contrast with theoretical predictions, we find that the job survival probability is not smaller for the treated and even significantly larger in some cases. We investigate the composition of permanent workers hired after the reform and we find evidence of treated firms changing their recruitment strategy in favour of potentially more productive workers.
Social Science Research Network, 2016
In 2015 Italy adopted two different policies aimed at reducing labour market dualism and fostering employment: a generous permanent hiring subsidy and new regulations lowering firing costs and making them less uncertain. Using microdata for Veneto and exploiting some differences in the design of the policies, we evaluate the impact of each measure. Both contributed to double the monthly rate of conversion of fixed-term jobs into permanent positions. Moreover, around 40 per cent of new total gross hires with permanent job contracts occurred because of the incentives, whereas 5 per cent can be attributed to the new firing regulations. The new firing rules also made firms less reluctant to offer permanent job positions to yet untested workers. The possibility of benefitting from the incentives in case of a conversion also boosted temporary hiring, as it allowed firms to test for the quality of a job match.
A tale of comprehensive labor market reforms: Evidence from the Italian jobs act
Labour Economics, 2019
The Italian Jobs Act introduced a subsidy for new hirings as well as a new open ended labor contract based on graded security, with severance payments increasing with tenure, while phasing out the compulsory reinstatement of workers in the case of unfair dismissals applied until March 2015. Simple models of job creation and destruction predict that hiring subsidies and lower _ring costs unambiguously increase hirings. Moreover, lower _ring costs associated with graded security should also increase layoffs. These effects need not to be uniform across the size distribution of firms, especially when firms of different size are treated differently by the policy changes as in the case of the Jobs Act. On the one hand, the hiring subsidy was proportional to wages, but had a cap, hence was more generous for small firms-typically paying lower wages than large firmsmaking them particularly responsive along the job creation margin. On the other hand, the reduction in _ring costs applied mainly to large firms concentrating on them the adjustment along the job destruction margin. To investigate empirically the effects of the Italian Jobs Act, we draw on a unique dataset covering the universe of private firms in Italy having at least once 10 to 20 employees in the two years prior to the reform of January 2015. We find evidence of a substantial increase in open ended hirings, and in the transformation of fixed-term into open ended contracts, in the aftermath of the Jobs Act. The effects of the Jobs Act on firings-converselyare much smaller, and are concentrated on large _firms, while small _firms react more intensively-creating new open ended contracts-to the hiring subsidy.
Labour market reforms in Italy
2015
Law 183 of 2014, evocatively named the ‘Jobs Act’, has determined a deep change in the Italian industrial relations. Bringing at completion a reform process begun in the 1990s, the Jobs Act has introduced a new contract type- ‘contratto a tutele crescenti ’- implying a substantial downsize of obligation for workers ’ reinstatement in case of firms invalidly firing them. The new permanent contract is therefore deprived of the substantial re-quirements of an open-ended contract. The Law has also weakened the legal constraints for firms intending to monitor workers through electronic devices and introduced new incentives for firms using temporary contracts. This article frames the Jobs Act within the overall labour market reform process occurred in Italy since mid-nineties and provides a first evaluation of its impacts on the Italian labour market. Taking advantage of different data sources (administrative and labour force data) and concentrating the analysis over the period after the ...
Labour market reforms in Italy: evaluating the effects of the Jobs Act
Law 183 of 2014, evocatively named the ‘Jobs Act’, has determined a deep change in the Italian industrial relations. Bringing at completion a reform process begun in the 1990s, the Jobs Act has introduced a new contract type - ‘contratto a tutele crescenti’ - implying a substantial downsize of obligation for workers’ reinstatement in case of firms invalidly firing them. The new permanent contract is therefore deprived of the substantial requirements of an open-ended contract. The Law has also weakened the legal constraints for firms intending to monitor workers through electronic devices and introduced new incentives for firms using temporary contracts. This article frames the Jobs Act within the overall labour market reform process occurred in Italy since mid-nineties and provides a first evaluation of its impacts on the Italian labour market. Taking advantage of di↵erent data sources (administrative and labour force data) and concentrating the analysis over the period after the Jobs Act implementation, the investigation provides the following results: the expected boost in employment growth is not detected; an increase in the share of temporary contracts over the open-ended ones is observed; a raise of part-time contracts within the new permanent positions emerges. The analysis shows that the Jobs Act failed in achieving its main goals. We discuss the observed evidence evaluating the appropriateness of the Law 183/2014 in the present Italian economic context accounting, in particular, for the structural e↵ects of the recent crisis.
Firms'Training Decisions and Unemployment in Italian Labour Markets
2002
Some recent theories of human capital investments show that firms could be interested in paying for the general training of their workers. However, when search costs are low because there is a large availability of skilled workers on the market (that is, when the skilled unemployment/vacancy ratio is high), firms might find it optimal to hire skilled workers on the market rather than provide training to inexperienced workers. In this paper, these aspects are studied through a model with search and matching frictions. In order to empirically verify the relationship between training and labour market tightness across Italian regions, we use, as exogenous determinants of unemployment, the regional differences in separation rates and in labour productivity (in face of a centralised wage bargaining system). Consistently with theoretical predictions, the evidence shows that training is negatively influenced by unemployment and turnover while labour productivity has a positive effect on it.
The Management of Redundancies in Europe: The Case of Italy
Labour, 1999
The paper presents the findings of comparative and interdisciplinary legal and economic study on managing labour redundancies in seven EU member countries. It is structured for comparability between the systems examined. The introductory section contains an account of the evolution of the Italian labour market, with special reference to redundancy trends, of the features of the programmes for managing redundancies, of the roles of firms and the`external environment' in handling workforce adjustments. The second section presents a map of policies that work to prevent labour redundancies (preventive measures) such as flexibility, training etc. Next, the instruments for handling temporary labour redundancies (retentive measures) are examined (e.g. short-time working, temporary layoffs etc.). The following section is devoted to instruments and programmes involved in the management of permanent labour redundancies (expulsive measures), e.g. collective dismissals, severance pay etc. The final section provides an overall assessment of the Italian system for managing labour redundancies, and briefly discusses the national debate on the prospects for reform, in light of the principles and policies of convergence set forth by the European Union.
Stepping stones versus dead end jobs: Exits from temporary contracts in Italy after the 2003 reform
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