Job Protection and Mortgage Conditions: Evidence from Italian Administrative Data

Paolo Emilio Mistrulli, Tommaso Oliviero (), Zeno Rotondi () and Alberto Zazzaro ()
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Zeno Rotondi: Unicredit

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: In this paper we combine administrative data from the Italian National Institute for Social Security and proprietary data from a major Italian commercial bank to analyse the impact of job protection legislation on mortgage conditions. An exogenous change in the degree of job protection against individual dismissals of workers with open-ended contracts is identified by exploiting the 2015 Labor market reform, the so-called Jobs Act, which reduced employment protection of newly hired employees in medium and large private firms. We find that the weaker job security induced by the 2015 legislation change leads to a lower mortgage amount and a lower leveraging capacity, as measured by the loan-to-value ratio. Furthermore, the effect of job insecurity is mitigated by the presence of co-mortgagors while it is amplified for young and low-income mortgagors.

Keywords: Employment protection law; job stability; mortgage market. (search for similar items in EconPapers)
JEL-codes: C21 G51 J41 (search for similar items in EconPapers)
Date: 2022-03-31
New Economics Papers: this item is included in nep-ban, nep-eur, nep-lma and nep-ure
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Job Protection and Mortgage Conditions: Evidence from Italian Administrative Data (2023)
Working Paper: Job protection and mortgage conditions: Evidence from Italian administrative data (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:642

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