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Institutional Rigidities and Employment on the Italian Labour Market: the Dynamic of the Employment in the Large Industrial Firms

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Many indicators (OECD 1994) show that the Italian labour market is characterised by a strong pro-workers and pro-unions legislation. This is usually interpreted as a high degree of rigidity. According to the theory of appropriability in presence of putty-clay investments (Caballero and Hammour (1998a,b)), such “institutional push” should generate low profits in the short run, and substitution away from labour in the long run. We analyse the labour input behaviour in Italian large firms, together with the institutional evolution in the labour market. We show that the theory of appropriability provides a parsimonious account of both employment dynamics and innovations in legislation.

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Bibliographic Info

Paper provided by CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy in its series CELPE Discussion Papers with number 53.

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Date of creation: May 2000
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Handle: RePEc:sal:celpdp:53

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Cited by:
  1. Lorenzo Carbonari, 2009. "How variable is labor input in the Italian manufacturing: the case of the pharmaceutical industry," CEIS Research Paper 140, Tor Vergata University, CEIS, revised 30 Jun 2009.
  2. Carbonari, Lorenzo, 2012. "Quasi-fixed inputs in the Italian manufacturing: The case of the pharmaceutical industry," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 25(1), pages 51-69.

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