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Abstract

A long-standing economic tradition maintains that labour supply reacts to market tightness; its sensitivity to job quality has received less attention. If firms hire workers with both temporary and open-end contracts, does participation increase when more permanent jobs are available? We investigate this relationship within a policy evaluation framework; in particular, we examine how labour supply reacted in Italy to a recent subsidy in favour of open-end contracts. This subsidy increased labour force participation by 1.4% in 2001 and 2.1% in 2002. This increase was concentrated on males aged 35-54, with a low or at most a secondary schooling level, and might be due to the choice to leave undegraound economy.

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File URL: http://www.bancaditalia.it/pubblicazioni/econo/temidi/td05/td552_05/td552/tema_552.pdf
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Bibliographic Info

Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 552.

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Date of creation: Jun 2005
Date of revision:
Handle: RePEc:bdi:wptemi:td_552_05

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Postal: Via Nazionale, 91 - 00184 Roma
Web page: http://www.bancaditalia.it
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Related research

Keywords: labour supply; program evaluation; temporary contracts; open-end contracts; shadow economy;

Other versions of this item:

Find related papers by JEL classification:

• D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
• H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
• J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
• J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

This paper has been announced in the following NEP Reports:

• NEP-ALL-2005-07-25 (All new papers)
• NEP-EEC-2005-07-25 (European Economics)
• NEP-PBE-2005-07-25 (Public Economics)

References

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1. Pietro Garibaldi & Etienne Wasmer, 2005. "Equilibrium Search Unemployment, Endogenous Participation, And Labor Market Flows," Journal of the European Economic Association, MIT Press, vol. 3(4), pages 851-882, 06.
   
   • Garibaldi, Pietro & Wasmer, Etienne, 2005. "Equilibrium Search Unemployment, Endogenous Participation and Labor Market Flows," Open Access publications from Sciences Po info:hdl:2441/8921, Sciences Po.
   • Garibaldi, Pietro & Wasmer, Etienne, 2003. "Equilibrium Search Unemployment, Endogenous Participation and Labour Market Flows," CEPR Discussion Papers 3986, C.E.P.R. Discussion Papers.
2. cipollone piero & Anita Guelfi, 2003. "tax credit policy and firms' behaviour: the case of subsidy to open-end labour contract in italy," Temi di discussione (Economic working papers) 471, Bank of Italy, Economic Research and International Relations Area.
3. Stephen R. G. Jones & W. Craig Riddell, . "The Measurement Of Unemployment: An Empirical Approach," Canadian International Labour Network Working Papers 09, McMaster University.
   
   • Stephen R. G. Jones & W. Craig Riddell, 1999. "The Measurement of Unemployment: An Empirical Approach," Econometrica, Econometric Society, vol. 67(1), pages 147-162, January.
   • Jones, S.R.G. & Riddell, W.C., 1993. "The Measurement of Unemployment: An Empirical Approach," UBC Departmental Archives 93-48, UBC Department of Economics.

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