Employment Protection and Firm-Provided Training: Quasi-Experimental Evidence from a Labour Market Reform

Massimiliano Bratti, Maurizio Conti and Giovanni Sulis ()

No 12773, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In 2012, a labour market reform in Italy known as the Fornero Law substantially reduced firing restrictions for open-ended contracts in the case of firms with more than 15 employees. The results from a difference in regression discontinuities design that compares firms below versus those above the cut-off before and after the reform demonstrate that after the Fornero Law was introduced, the number of trained workers increased in firms just above the threshold, with an order of magnitude of approximately 1.5 additional workers in our preferred empirical specification. We show that this effect might be partly explained by the reduction in worker turnover and a lower use of temporary contracts at the threshold after the reform. Our study highlights the potentially adverse effects of employment protection legislation (EPL) on training in dual labour markets due to larger firms seeking to avoid the higher costs of EPL via temporary contracts.

Keywords: dual labour markets; employment protection legislation; training; temporary contracts; Italy (search for similar items in EconPapers)
JEL-codes: J42 J63 J65 M53 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2019-11
New Economics Papers: this item is included in nep-law and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - revised version published as 'Employment Protection and Firm-provided Training in Dual Labour Markets' in: Labour Economics, 2021, 69, 101972

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Related works:
Working Paper: Employment Protection and Firm-provided Training: Quasi-experimental Evidence from a Labour Market Reform (2019)
Working Paper: Employment Protection and Firm-provided Training: Quasi-experimental Evidence from a Labour Market Reform (2019)
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