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Enforcement of Employment Protection and the hiring behaviour of firms. Evidence from a large Italian region

  • Elisabetta Trevisan

    ()

    (Department of Economics, University Of Venice C� Foscari)

This paper investigates the effect of the Employment Protection Legislation (EPL) on the hiring behaviour of the firms when the level of EPL is differentiated by firms size. In this respect, Italy represents an interesting case because workers hired by bigger firms enjoy a stronger protection than workers hired by small firms; the threshold size is fixed by law at 15 employees. A model derives the conditions under which firms decide whether to upsize or not and, in case of upsizing, whether to hire temporary (i.e. workers who are not counted in the threshold, as apprentices in Italy) or permanent workers. The model has been tested using data drawn from the VWH (Veneto Workers History) registered data for firms and workers, from 1982 to 1997, for a large Italian region (i.e. Veneto). Firms close to the threshold are not scared to growth but they are more likely to hire apprentices than permanent workers.

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File URL: http://www.unive.it/media/allegato/DIP/Economia/Working_papers/Working_papers_2008/WP_DSE_trevisan_25_08.pdf
File Function: 2008
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Paper provided by Department of Economics, University of Venice "Ca' Foscari" in its series Working Papers with number 2008_25.

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Length: 31
Date of creation: 2008
Date of revision:
Handle: RePEc:ven:wpaper:2008_25
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  1. Fabiano Schivardi & Roberto Torrini, 2004. "Threshold Effects and Firm Size: the Case of Firing Costs," CEP Discussion Papers dp0633, Centre for Economic Performance, LSE.
  2. Samuel Bentolila & Giuseppe Bertola, 1990. "Firing Costs and Labour Demand: How Bad is Eurosclerosis?," Review of Economic Studies, Oxford University Press, vol. 57(3), pages 381-402.
  3. David Card & Lara D. Shore-Sheppard, 2003. "Using Discontinuous Eligibility Rules to Identify the Effects of the Federal Medicaid Expansions on Low Income Children," Department of Economics Working Papers 2003-09, Department of Economics, Williams College.
  4. Patrizio Pagano & Fabiano Schivardi, 2003. "Firm Size Distribution and Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(2), pages 255-274, 06.
  5. Steven J. Davis & Magnus Henrekson, 1997. "Explaining National Differences in the Size and Industry Distribution of Employment," NBER Working Papers 6246, National Bureau of Economic Research, Inc.
  6. Pietro Garibaldi & Lia Pacelli & Andrea Borgarello, 2003. "Employment Protection Legislation and the Size of Firms," Working Papers 247, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  7. David H. Autor & John J. Donohue III & Stewart J. Schwab, 2003. "The Costs of Wrongful-Discharge Laws," NBER Working Papers 9425, National Bureau of Economic Research, Inc.
  8. Krishna B. Kumar & Raghuram G. Rajan & Luigi Zingales, . "What Determines Firm Size?," CRSP working papers 496, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
  9. Adriana Kugler, 1999. "The Impact of Firing Costs on Turnover and Unemployment: Evidence from the Colombian Labour Market Reform," International Tax and Public Finance, Springer, vol. 6(3), pages 389-410, August.
  10. Garibaldi, Pietro, 2006. "Personnel Economics in Imperfect Labour Markets," OUP Catalogue, Oxford University Press, number 9780199280674, December.
  11. Bertola, Giuseppe, 1999. "Microeconomic perspectives on aggregate labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 45, pages 2985-3028 Elsevier.
  12. Eric Bartelsman & Stefano Scarpetta & Fabiano Schivardi, 2003. "Comparative Analysis of Firm Demographics and Survival: Micro-Level Evidence for the OECD Countries," OECD Economics Department Working Papers 348, OECD Publishing.
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