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Hiring incentives and labour force participation in Italy

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Author Info
Piero Cipollone () (BANK OF ITALY)
Corrado Di Maria () (Tilburg University)
Anita Guelfi () (Confindustria)

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

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Date of creation: Jun 2005
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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;

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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

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References listed on IDEAS
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.:
  1. Guiso, Luigi & Parigi, Giuseppe, 1996. "Investment and Demand Uncertainty," CEPR Discussion Papers 1497, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Andrea Brandolini & Piero Cipollone & Eliana Viviano, 2006. "Does The Ilo Definition Capture All Unemployment?," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 153-179, 03. [Downloadable!] (restricted)
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  3. 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 Department. [Downloadable!]
  4. Stephen R. G. Jones & W. Craig Riddell, . "The Measurement Of Unemployment: An Empirical Approach," Canadian International Labour Network Working Papers 09, McMaster University. [Downloadable!]
    Other versions:
  5. Garibaldi, Pietro & Wasmer, Etienne, 2003. "Equilibrium Search Unemployment, Endogenous Participation and Labour Market Flows," CEPR Discussion Papers 3986, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
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