Employment Protection, Workforce Mix and Firm Performance

Chiara Ardito, Fabio Berton, Pacelli Lia () and Filippo Passerini
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Pacelli Lia: Department of Economics and Statistics, University of Torino, Lungo Dora Siena, 100/A, Torino 10153, Italy

The B.E. Journal of Economic Analysis & Policy, 2022, vol. 22, issue 3, 611-621

Abstract: We measure the impact of employment protection reduction in an uncertain framework on firms’ hires and performance, exploiting the Italian 2015 Jobs Act. Results indicate that firms (1) stabilize workforce mainly through contract transformations of low-tenure and low-human-capital incumbent workers performing high-physical and low-intellectual tasks; (2) apply a cost-saving strategy that increases profits and decreases value added per-head. Effects are stronger among non-exporting and non-innovative firms. Our evidence casts doubts on the effectiveness of employment protection reductions in enhancing productivity in the long run.

Keywords: employment protection; human capital; productivity; tenure; tasks (search for similar items in EconPapers)
JEL-codes: J08 J21 J24 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Working Paper: Employment Protection, Workforce Mix and Firm Performance (2021)
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DOI: 10.1515/bejeap-2021-0396

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