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Job Protection and Mortgage Conditions: Evidence from Italian Administrative Data

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  • Paolo Emilio Mistrulli
  • Tommaso Oliviero
  • Zeno Rotondi
  • Alberto Zazzaro

Abstract

This paper combines administrative data from the Italian social security administration and proprietary data from a major Italian commercial bank to analyse the impact of job protection legislation on mortgage conditions. An exogenous change in the degree of job protection against individual dismissals of workers with open‐ended contracts is identified by exploiting the labour market reform of 2015, the ‘Jobs Act’, which weakened the employment protection of new hires at medium‐sized and large private firms. We find that the lessening of job security led to lower mortgage amounts and a fall in leveraging capacity, as measured by the loan‐to‐value ratio. The impact of job insecurity is mitigated by the presence of co‐mortgagors; it is aggravated for young and low‐income mortgagors.

Suggested Citation

  • Paolo Emilio Mistrulli & Tommaso Oliviero & Zeno Rotondi & Alberto Zazzaro, 2023. "Job Protection and Mortgage Conditions: Evidence from Italian Administrative Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 85(6), pages 1211-1237, December.
    • Handle: RePEc:bla:obuest:v:85:y:2023:i:6:p:1211-1237
    DOI: 10.1111/obes.12558
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    Cited by:

    1. Maria De Paola & Roberto Nisticò & Vincenzo Scoppa, 2020. "Fertility Decisions And Employment Protection: The Unintended Consequences Of The Italian Jobs Act," Working Papers 202003, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.

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    More about this item

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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