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Identifying the effects of firing restrictions through size-contingent differences in regulation Author info | Abstract | Publisher info | Download info | Related research | Statistics Schivardi, Fabiano
Torrini, Roberto
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We study the effects of the more stringent employment protection legislation (EPL) that applies in Italy to firms with over 15 employees. We consider firms' propensity to grow when close to that threshold and changes in employment policies when they pass it. Using a comprehensive matched employer-employees dataset, we find that the probability of firms' growth is reduced by around 2 percentage points near the threshold. Using the stochastic transition matrix for firm size, we compute the long-run effects of EPL on the size distribution, finding that they are quantitatively modest. We also find that, contrary to the implications of more stringent firing restrictions, workers in firms just above the threshold have on average less stable employment relations than those just below it. We document that this might be because firms above the threshold make greater use of flexible employment contracts, arguably to circumvent the stricter regulation on open-end contracts.
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Article provided by Elsevier in its journal Labour Economics .
Volume (Year): 15 (2008)
Issue (Month): 3 (June)
Pages: 482-511
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Handle: RePEc:eee:labeco:v:15:y:2008:i:3:p:482-511Contact details of provider: Web page: http://www.elsevier.com/locate/labeco
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
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"Dismissals for cause: The difference that just eight paragraphs can make ,"
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[Downloadable!] (restricted) Fabiano Schivardi & Eliana Viviano, 2007.
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