Grassi, Emanuele (2009): EPL and Job Contract Conversion Rate: The Italian CFL Case.
Download (199kB) | Preview
This paper analyzes the effect of EPL on the conversion rate of temporary contracts into permanent ones in the same firm. Once EPL is enforced, two effects might arise: employers could tend to replace their permanent workforce with short-term employment because of the lower expected value of a filled job, but firms might also prefer to stabilize part of their temporary workforce. In fact, firms already know about workers' skills and attitudes and workers have acquired information about wages, career prospects and employers' expectations. This in turn implies a lower risk of job-breakup. Which of these two effects is dominant is ultimately an empirical question. I exploit a natural experiment set up yielded by the Italian 1990 reform which introduced unjust dismissal costs for small businesses to identify the effect of EPL on the conversion rate of working and training contracts (Contratti di formazione e lavoro - CFL) into permanent ones in the same firm.
|Item Type:||MPRA Paper|
|Original Title:||EPL and Job Contract Conversion Rate: The Italian CFL Case|
|Keywords:||dimissal costs; job contract conversion rate; temporary workers|
|Subjects:||J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J63 - Turnover; Vacancies; Layoffs
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J65 - Unemployment Insurance; Severance Pay; Plant Closings
|Depositing User:||Emanuele Grassi|
|Date Deposited:||13. Jan 2009 07:01|
|Last Modified:||18. Feb 2013 19:14|
Angrist, J. D. and Krueger, A.: 1999, Empirical Strategies in Labor Economics, Vol. 3A of Handbook of Labor Economics, Orley Ashenfelter and David Card edn, Elsevier Science, Amsterdam: North-Holland.
Autor, D. H., Kerr, W. R. and Kugler, A. D.: 2007, Does Employment Protection Reduce Productivity? Evidence From US States, The Economic Journal 117, F189-F217.
Bassanini, A., Nunziata, L. and Venn, D.: 2008, Job Protection Legislation and Productivity Growth in OECD Countries, IZA Discussion Paper (3555).
Blanchard, O. and Portugal, P.: 2001, What Hides behind an Unemployment Rate: Comparing Portuguese and U.S. Labor Markets, The American Economic Review 91(1), 187-207.
Boeri, T. and Jimeno, J.: 2005, The Effects of Employment Protection: Learning from Variable Enforcement, European Economic Review 49(8), 2057-2077.
Cahuc, P. and Postel-Vinay, F.: 2002, Temporary Jobs, Employment Protection and Labor Market Performance, Labour Economics 9, 63-91.
Cahuc, P. and Zylberberg, A.: 2004, Labor Economics, The MIT Press.
Contini, B., Cornaglia, F., Malpede, C. and Rettore, E.: 2002, Measuring the impact of the Italian CFL programme on the job opportunities for the youths, laboratoriorevel li.it.
Contini, B. and Revelli, F.: 2004, On the Welfare Effect of a Wage Subsidy on Youth Labor: Italyís CFL Program, laboratoriorevel li.it .
Eissa, N. and Liebman, J.: 1996, Labor Supply Response to the Earned Income Tax Credit, The Quarterly Journal of Economics 111(2), 605-637.
Gagliarducci, S.: 2005, The Dynamics of Repeated Temporary Jobs, Labour Economics 12, 429-448.
Garibaldi, P.: 1998, Job Flow Dynamics and Firing Retrictions, European Economic Review 42, 245-275.
Garibaldi, P. and Pacelli, L.: 2008, Do Larger Severance Payments Increase Individual Job Duration?, Labour Economics 15, 31.
Ichino, A. and Riphahn, R.: 2005, The Effect of Employment Protection on Worker Effort: Absenteeism During and After Probation, Journal of the European Economic Association 3(1), 120-143.
Imbens, G. W. and Rubin, D. B.: 2008, Causal Inference, (forthcoming).
Kugler, A. D. and Pica, G.: 2008, Effects of Employment Protection on Worker and Job Flows: Evidence from the 1990 Italian Reform, Labour Economics 15(1), 78-95.
Lazear, E.: 1990, Job Security Provisions and Employment, Quarterly Journal of Economics 105(3), 699-726.
Lee, M.-J.: 2005, Micro-Econometrics for Policy, Program, and Treatment Effects, Oxford University Press.
Lee, M.-J. and Kang, C.: 2006, Identification for Difference in Differences with Cross-Section and Panel Data, Economics Letters 92(2), 270-276.
Leonardi, M. and Pica, G.: 2007, Employment Protection Legislation and Wages, IZA Discussion Paper (2680).
Mortensen, D. and Pissarides, C.: 1994, Job Creation and Job Destruction in the Theory of Unemployment, Review of Economic Studies 61(3), 397-415.
Rosenbaum, P. R. and Rubin, D. B.: 1983, The Central Role of the Propensity Score in Observational Studies for Causal Effects, Biometrika 70(1), 41-55.
Tattara, G. and Valentini, M.: 2005, Evaluating the Italian Training on the job Contract (CFL), Università Cà Foscari di Venezia .