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Employment protection, job-tenure and short term mobility wage gains - A new explanation for the Italian case

Author

Listed:
  • Paolo Naticchioni
  • Demian Panigo

    () (Dipartimento di Economia, Sapienza University of Rome Italy)

Abstract

This paper investigates theoretical and empirical links between job tenure and short-term mobility wage gains. Standard theoretical approaches examining this subject predict a negative correlation between these variables. Furthermore, this result has been confirmed in different applied researches for US. However, European labour market institutions appear to be quite di??erent from US ones, especially for employment protection and turnover costs. Taking this feature into account we develop a theoretical model, evaluated through analytical and simulation procedures, where optimal switching conditions determine a positive correlation between job-tenure and short-term mobility wage gains. Our main proposition is confirmed for the Italian case using an administrative panel database (INPS) and different econometric specifications.

Suggested Citation

  • Paolo Naticchioni & Demian Panigo, 2004. "Employment protection, job-tenure and short term mobility wage gains - A new explanation for the Italian case," Working Papers - Dipartimento di Economia 4-DEISFOL, Dipartimento di Economia, Sapienza University of Rome, revised 2004.
  • Handle: RePEc:des:wpaper:10
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    File URL: http://dipartimento.dse.uniroma1.it/DSEISFOL/papers/042004.pdf
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    More about this item

    Keywords

    Job-tenure; Employment Protection; MobilityWage Gains; Risk Aversion; Panel Data Estimation;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • 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
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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