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Abstract

This paper investigates the effect of the Employment Protection Legislation (EPL) on the hiring behaviour of the firms when the level of EPL is differentiated by firms size. In this respect, Italy represents an interesting case because workers hired by bigger firms enjoy a stronger protection than workers hired by small firms; the threshold size is fixed by law at 15 employees. A model derives the conditions under which firms decide whether to upsize or not and, in case of upsizing, whether to hire temporary (i.e. workers who are not counted in the threshold, as apprentices in Italy) or permanent workers. The model has been tested using data drawn from the VWH (Veneto Workers History) registered data for firms and workers, from 1982 to 1997, for a large Italian region (i.e. Veneto). Firms close to the threshold are not scared to growth but they are more likely to hire apprentices than permanent workers.

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File URL: http://www.unive.it/media/allegato/DIP/Economia/Working_papers/Working_papers_2008/WP_DSE_trevisan_25_08.pdf
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Bibliographic Info

Paper provided by Department of Economics, University of Venice "Ca' Foscari" in its series Working Papers with number 2008_25.

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Length: 31
Date of creation: 2008
Date of revision:
Handle: RePEc:ven:wpaper:2008_25

Contact details of provider:
Postal: Cannaregio, S. Giobbe no 873 , 30121 Venezia
Phone: +39-0412349621
Fax: +39-0412349176
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Web page: http://www.unive.it/dip.economia
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Related research

Keywords: Employment Protection; Hiring; Random Effects; Regression Discontinuity Design.;

Find related papers by JEL classification:

• C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
• C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
• J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

This paper has been announced in the following NEP Reports:

• NEP-ALL-2008-09-13 (All new papers)
• NEP-LAB-2008-09-13 (Labour Economics)

References

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Citations

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Cited by:

1. Henrekson, Magnus & Johansson, Dan & Stenkula, Mikael, 2010. "Taxation, Labor Market Policy and High-Impact Entrepreneurship," Working Paper Series 826, Research Institute of Industrial Economics.
   
   • Magnus Henrekson & Dan Johansson & Mikael Stenkula, 2010. "Taxation, Labor Market Policy and High-Impact Entrepreneurship," Journal of Industry, Competition and Trade, Springer, vol. 10(3), pages 275-296, September.
   • Henrekson, Magnus & Johansson, Dan & Stenkula, Mikael, 2010. "Taxation, Labor Market Policy and High-Impact Entrepreneurship," Ratio Working Papers 149, The Ratio Institute.
2. Gielen, Anne C. & Tatsiramos, Konstantinos, 2012. "Quit Behavior and the Role of Job Protection," IZA Discussion Papers 6540, Institute for the Study of Labor (IZA).
   
   • Gielen, Anne C. & Tatsiramos, Konstantinos, 2012. "Quit behavior and the role of job protection," Labour Economics, Elsevier, vol. 19(4), pages 624-632.

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