Hiring Incentives and Labour Force Participation in Italy

Piero Cipollone (), Corrado Di Maria and Anita Guelfi ()

Giornale degli Economisti, 2004, vol. 63, issue 2, 161-203

Abstract: A long-standing economic tradition maintains that labour supply reacts to market tightness; its sensitivity to job quality has received less attention. If firms hire workers with both temporary and open-ended contracts, does participation increase when more permanent jobs are available? We investigate this relationship within a policy evaluation framework; in particular, we examine how labour supply reacted in Italy to a recent subsidy in favour of open-ended contracts. This subsidy increased labour force participation by 1.4% in 2001 and 2.1% in 2002. This increase was concentrated on males aged 35-54, with a low or at most a secondary schooling level.

Keywords: labour supply; program evaluation; temporary contracts; open-ended contracts; shadow economy (search for similar items in EconPapers)
JEL-codes: D78 H25 J22 J38 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (1)

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Working Paper: Hiring incentives and labour force participation in Italy (2005)
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