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Employment Protection, Workforce Mix and Firm Performance

Author

Listed:
  • Ardito Chiara
  • Berton Fabio
  • Pacelli Lia

    (Department of Economics and Statistics, University of Torino, Lungo Dora Siena, 100/A, Torino, 10153, Italy)

  • Passerini Filippo

    (Department of Economics and Finance, Catholic University of Milan, Via Necchi, 5, Milan, 20123, Italy)

Abstract

We measure the impact of employment protection reduction in an uncertain framework on firms’ hires and performance, exploiting the Italian 2015 Jobs Act. Results indicate that firms (1) stabilize workforce mainly through contract transformations of low-tenure and low-human-capital incumbent workers performing high-physical and low-intellectual tasks; (2) apply a cost-saving strategy that increases profits and decreases value added per-head. Effects are stronger among non-exporting and non-innovative firms. Our evidence casts doubts on the effectiveness of employment protection reductions in enhancing productivity in the long run.

Suggested Citation

  • Ardito Chiara & Berton Fabio & Pacelli Lia & Passerini Filippo, 2022. "Employment Protection, Workforce Mix and Firm Performance," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 22(3), pages 611-621, July.
    • Handle: RePEc:bpj:bejeap:v:22:y:2022:i:3:p:611-621:n:8
    DOI: 10.1515/bejeap-2021-0396
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

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    2. Giuseppe Grasso & Konstantinos Tatsiramos, 2023. "The Impact of Restricting Fixed-Term Contracts on Labor and Skill Demand," CESifo Working Paper Series 10693, CESifo.
    3. Bottasso, Anna & Bratti, Massimiliano & Cardullo, Gabriele & Conti, Maurizio & Sulis, Giovanni, 2023. "Labor Market Regulation and Firm Adjustments in Skill Demand," IZA Discussion Papers 16262, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    employment protection; human capital; productivity; tenure; tasks;
    All these keywords.

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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