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Employment protection and firm-provided training in dual labour markets

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  • Bratti, Massimiliano
  • Conti, Maurizio
  • Sulis, Giovanni

Abstract

In this paper we leverage a labour market reform (Fornero Law) which reduced firing restrictions for open-ended contracts in the case of firms with more than 15 employees in Italy. The results from a Difference in Regression Discontinuities design demonstrate that after the reform, the number of trained workers increased in firms just above the threshold by approximately 1.5 additional workers. We show that this effect can be explained by the reduction in worker turnover and a higher use of permanent contracts. Our study highlights the potentially adverse effects of employment protection legislation on training in dual labour markets.

Suggested Citation

  • Bratti, Massimiliano & Conti, Maurizio & Sulis, Giovanni, 2021. "Employment protection and firm-provided training in dual labour markets," Labour Economics, Elsevier, vol. 69(C).
    • Handle: RePEc:eee:labeco:v:69:y:2021:i:c:s0927537121000075
    DOI: 10.1016/j.labeco.2021.101972
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    9. Gianluca Cerruti & Gianluca Mazzarella & Mauro Migliavacca, 2023. "Employment protection legislation and household formation: evidence from Italy," Review of Economics of the Household, Springer, vol. 21(3), pages 913-939, September.

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    More about this item

    Keywords

    Employment protection; Training; Dual labour markets; Permanent contracts;
    All these keywords.

    JEL classification:

    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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