The Effects of Employment Protection on the Italian Labour Market

Adriana Kugler and Giovanni Pica

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: This paper uses the Italian Social Security employer-employee panel to study the effect of a reform that introduced a cost for unjust dismissals only for firms below 15 employees, while leaving firing costs unchanged for bigger firms. We find that the increase in dismissal costs decreased accessions and separations in small relative to big firms, the more so in sectors with higher employment volatility. Moreover, the reform reduced firms’ entry rates while increasing the exit rate. We also find evidence that higher EPL flattened employment policies over the cycle

Keywords: Costs of Unjust Dismissals; European Unemployment; Firms’ Entry and Exit; Employment Volatility (search for similar items in EconPapers)
JEL-codes: E24 J63 J65 (search for similar items in EconPapers)
Date: 2005-03-01
New Economics Papers: this item is included in nep-eec, nep-ent, nep-lab, nep-mac and nep-reg
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Citations: View citations in EconPapers (1)

Published under the title "Effects of Employment Protection on Job and Worker Flows: Evidence from the 1990 Italian Reform" in Labour Economics, 2008, Vol. 15, Issue 1, pages 78-95.

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Related works:
Working Paper: Effects of Employment Protection on Worker and Job Flows: Evidence from the 1990 Italian Reform (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:135

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