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Do Local Institutions Affect Labour Market Participation? The Italian Case

Massimiliano Agovino, Garofalo Antonio and Cerciello Massimiliano
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Cerciello Massimiliano: Department of Economic and Legal Studies, University of Naples “Parthenope”, Naples, Italy

The B.E. Journal of Economic Analysis & Policy, 2019, vol. 19, issue 2, 21

Abstract: Italy features very low labour market participation rates for both men and women, coupled with a sizeable participation gender gap. This work investigates empirically the relation between institutional quality and labour market participation at the local level. Using official records on the Italian provinces over the 2004–2012 timespan and the Institutional Quality Index, we use a Spatial Lag of X model to gauge the direct and indirect impact of local institutions on male and female participation rates, with particular regard to the participation gender gap. The results support the idea that institutional quality has a significant impact on local labour market participation, for both men and women, while it does not affect the participation gap. Moreover, institutions generate spatial spillovers, affecting participation in neighbouring provinces. Finally, the availability of public child care facilities is as a key determinant of female participation.

Keywords: labour market participation; spatial spillovers; institutional quality; participation gender gap; local labour markets; spatial panel analysis (search for similar items in EconPapers)
JEL-codes: J16 R12 R23 (search for similar items in EconPapers)
Date: 2019
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