Labour Courts delays and the composition of employment: Is labour encouraged or endangered by institutions?
Employment protection is the results of labour laws and of institutional factors which are not encompassed in official legislation. Courts? delay is settling labour disputes are among those factors. Using individual data on the Italian workforce for the period 2007-2010 and exploiting the territorial heterogeneity in the duration of labour suits among Italian regions we investigate the effect of labour trial delays on the composition of employment. We fi?nd that Labour Courts'delays hinder the occupation rate for specific categories of workers, i.e. women, young and low skilled people, while increasing the inactivity rate of the same groups; furthermore, long duration of trials reduces the likelyhood of accessing a permanent occupation for the same groups. Finally, it induces a shift from short term to long term unemployment.
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