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Employment protection and fertility decisions: the unintended consequences of the Italian Jobs Act
[Wrongful discharge laws and innovation]

Author

Listed:
  • Maria De Paola
  • Roberto Nisticò
  • Vincenzo Scoppa

Abstract

SUMMARYWe study the effect of a reduction in employment protection on workers’ fertility decisions. Using data from the Italian Labor Force Survey for 2013–18, we analyse how the propensity to have a child has been affected by the 2015 labour market reform dubbed the ‘Jobs Act’, which reduced employment protection for employees of larger firms while leaving small firms essentially untouched. We take a Difference-in-Differences identification approach and compare the change in fertility decisions of women employed in large firms with that of women in small firms. We find that the former’s probability of having a child is 1.4 percentage points lower. A battery of robustness checks confirms this finding. The effect also holds when possible sorting issues are accounted for by an instrumental variable approach. We document substantial heterogeneous effects by age, marital status, parity and geographical area as well as by education and earnings. Our findings suggest the potential unintended consequences on fertility that labour market reforms introducing greater flexibility may have by heightening career insecurity.

Suggested Citation

  • Maria De Paola & Roberto Nisticò & Vincenzo Scoppa, 2021. "Employment protection and fertility decisions: the unintended consequences of the Italian Jobs Act [Wrongful discharge laws and innovation]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 36(108), pages 735-773.
    • Handle: RePEc:oup:ecpoli:v:36:y:2021:i:108:p:735-773.
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    File URL: http://hdl.handle.net/10.1093/epolic/eiab015
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    Citations

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    Cited by:

    1. Bertoni, Marco & Chinetti, Simone & Nistico, Roberto, 2023. "Employment Protection, Job Insecurity, and Job Mobility," IZA Discussion Papers 16647, Institute of Labor Economics (IZA).
    2. Elena Bastianelli & Raffaele Guetto & Daniele Vignoli, 2023. "Employment Protection Legislation, Labour Market Dualism, and Fertility in Europe," European Journal of Population, Springer;European Association for Population Studies, vol. 39(1), pages 1-27, December.
    3. Pierre Cahuc & Pauline Carry & Franck Malherbet & Pedro S. Martins, 2023. "Spillover effects of employment protection," Nova SBE Working Paper Series wp655, Universidade Nova de Lisboa, Nova School of Business and Economics.

    More about this item

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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