Regolazione del mercato del lavoro e crescita dimensionale delle imprese: Una verifica sull'effetto soglia dei 15 dipendenti

This paper analyzes the effect of labour market regulation on firm’s behaviour in Italy. In particular, it focuses on the strictness of employment protection legislation in order to evaluate the impact on firms’ size growth. In ltaly, EPL is not enforced uniformly across firms: if they employ more than 15 employees are obliged the rehire an unfairly dismissed worker (article 18 of the labour code). With reference to a panel of manufacturing firms we test for the existence of discontinuities in firms’ growth rates close to 15 employment threshold. We analyze ISAE data considering the period 1999-2002. Two Empirical exercises have been carried out using Evaluation Methods generally adopted in evaluating the outcomes of training programs. In the first estimate we taking into account self selection mechanism. Further evidence is provided assuming a deterministic selection process (sharp Regression Discontinuity Design). In both empirical exercises we found significant but relatively small discouragement in firm’s growth caused by regulation. In the first empirical exercise the decrease of firm growth is estimated (ranging between 3 and 5%), a little lower in the second exercise (ranging between 1.5% and 2.5%).