tax credit policy and firms' behaviour: the case of subsidy to open-end labour contract in italy

Piero Cipollone () and Anita Guelfi ()

No 471, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: In the past decade fixed-term contracts have been widely used to ease the regulatory burden in several European labour markets. Because there is some concern that they might be a dead-end for many worker, policy makers have intervened to increase transitions from fixed-term to open-end contracts. The effects of these interventions have not been thoroughly studied. This paper is a contribution to fill the gap. We look at a recent Italian policy designed to foster hiring with open-end rather than with fixed-term contracts. Our results seem to indicate that most of the financial support was wasted because of the large dead-weight loss associated to the program. Firms used the subsidy primarily to hire under open-end contracts workers who would have been hired under such contracts regardless of the subsidy, albeit after a short transition into temporary employment

Keywords: tax credit; open-end contracts; fixed-term contracts; evaluation (search for similar items in EconPapers)
JEL-codes: D78 H25 J23 J38 (search for similar items in EconPapers)
Date: 2003-03
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://www.bancaditalia.it/pubblicazioni/temi-disc ... 0471/tema_471_03.pdf (application/pdf)

Related works:
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:bdi:wptemi:td_471_03

Access Statistics for this paper

More papers in Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area Contact information at EDIRC.
Bibliographic data for series maintained by ().