Two Tier Reforms of Employment Protection: a Honeymoon Effect?

Tito Boeri and Pietro Garibaldi

Economic Journal, 2007, vol. 117, issue 521, 357-385

Abstract: Labour market reforms increasing flexibility 'at the margin' have been recently paying out in terms of employment growth. This article argues that two-tier labour market reforms have a transitional 'honeymoon', job creating effect. In a dynamic model of labour demand under uncertainty, the article predicts that in the aftermath of reforms, beyond an increase in employment, there should be a reduction in 'employment inaction' and in the mean and cross-sectional variance of labour productivity. Based on a variety of firm-level data on Italy in the period 1995-2000, we find evidence of our empirical implications. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007.

Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (272)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Two Tier Reforms of Employment Protection: A Honeymoon Effect? (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecj:econjl:v:117:y:2007:i:521:p:357-385

Ordering information: This journal article can be ordered from
http://www.blackwell ... al.asp?ref=0013-0133

Access Statistics for this article

Economic Journal is currently edited by Martin Cripps, Steve Machin, Woulter den Haan, Andrea Galeotti, Rachel Griffith and Frederic Vermeulen

More articles in Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().