Firing costs and stigma: an empirical analysis

Patrizia Canziani

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: When information about workers'' abilities is imperfect, past employment histories are important determinants of unemployment duration. This paper studies the effects of employment protection laws on unemployment spells in two countries: Italy and Spain. Italy and Spain''s adoption of fixed-term contracts with lower firing costs in the mid 1980s provides an interesting empirical framework to study the effects of policies affecting firing costs. The evidence presented supports the hypothesis that when firing costs increase, so does the stigma attached to bad employment histories. First, I show that in Italy people, who became unemployed because of termination of the employment contract, have 10 per cent lower probability per year to remain unemployed than fired workers. Second in Spain, workers dismissed from a temporary job have 30 per cent shorter unemployment spells than workers fired from regulator contracts.

JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 48 pages
Date: 1997-07
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://eprints.lse.ac.uk/20330/ Open access version. (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:ehl:lserod:20330

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().