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Evaluating the effects of labour market reforms on job flows: The Italian case

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  • d'Agostino, Giorgio
  • Pieroni, Luca
  • Scarlato, Margherita

Abstract

In this paper, we assess the effects of the labour market reforms to enhance flexibility, implemented at the beginning of the new millennium in Italy. We contribute to the debate on whether temporary contracts have positive or negative effects on employment and workers' perspectives of transition to a permanent job. We use an unexploited panel dataset of work histories for 2003–2010 and propose an estimation method based on Markov chains to measure the effects of the reforms on individual employment. Contrary to the goals of the reforms, our estimates show a small positive effect on job creation and a substitution of permanent contracts with temporary contracts, a risk amplified for young people and workers in the depressed areas of Southern Italy.

Suggested Citation

  • d'Agostino, Giorgio & Pieroni, Luca & Scarlato, Margherita, 2018. "Evaluating the effects of labour market reforms on job flows: The Italian case," Economic Modelling, Elsevier, vol. 68(C), pages 178-189.
    • Handle: RePEc:eee:ecmode:v:68:y:2018:i:c:p:178-189
    DOI: 10.1016/j.econmod.2017.07.011
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    Cited by:

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    2. You, Jing & Wang, Shaoyang, 2018. "Unemployment duration and job-match quality in urban China: The dynamic impact of 2008 Labor Contract Law," Economic Modelling, Elsevier, vol. 71(C), pages 220-233.
    3. Maria Giovanna Bosco & Elisa Valeriani, 2018. "The Road to Permanent Work in Italy: “It’s Getting Dark, Too Dark to See”," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(3), pages 385-419, November.
    4. Arestis, Philip & Ferreiro, Jesus & Gomez, Carmen, 2023. "Does employment protection legislation affect employment and unemployment?11We acknowledge the comments of an editor and an associate editor of the journal and three reviewers. Their suggestions and r," Economic Modelling, Elsevier, vol. 126(C).
    5. Donatella Lanari & Giorgio d’Agostino & Luca Pieroni, 2022. "The unintended effects of increasing fixed-term employment on health," RIEDS - Rivista Italiana di Economia, Demografia e Statistica - The Italian Journal of Economic, Demographic and Statistical Studies, SIEDS Societa' Italiana di Economia Demografia e Statistica, vol. 76(3), pages 17-28, July-Sept.
    6. Brian Micallef & Reuben Ellul, 2020. "How Do Estimates of Inflation Persistence in Malta Compare with Other EU Countries?," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(7), pages 1-31, July.
    7. Mondolo, Jasmine, 2020. "Macro and microeconomic evidence on investment, factor shares, firm and labor dynamics in Italy and in Trentino," MPRA Paper 99138, University Library of Munich, Germany.
    8. Pieroni, Luca & d’Agostino, Giorgio & Lanari, Donatella & Scarlato, Margherita, 2023. "Temporary employment and fertility in Italy: The effect of two labor market reforms in the early 2000s," Economic Modelling, Elsevier, vol. 124(C).

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    More about this item

    Keywords

    Labour market policy; Atypical contract; Panel data; Inverse probability of weighting estimator;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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