Employment Protection, Workforce Mix and Firm Performance

Chiara Ardito, Fabio Berton, Lia Pacelli () and Filippo Passerini
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Lia Pacelli: University of Turin

No 14613, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We measure the impact of employment protection reduction in an uncertain framework on firms' hires and performance, exploiting the Italian 2015 Jobs Act. Results indicate that firms (1) stabilize workforce mainly through contract transformations of low-tenure and low-human-capital incumbent workers performing high-physical and low-intellectual tasks; (2) apply a cost-saving strategy that increases profits and decreases value added per-head. Effects are stronger among non-exporting and non-innovative firms. Our evidence casts doubts on the effectiveness of employment protection reductions in enhancing productivity in the long run.

Keywords: productivity; human capital; employment protection; tenure; tasks (search for similar items in EconPapers)
JEL-codes: J08 J21 J24 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2021-07
New Economics Papers: this item is included in nep-bec, nep-eff, nep-eur, nep-hrm, nep-isf, nep-sbm and nep-tid
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Citations: View citations in EconPapers (1)

Published - published in: B.E. Journal of Economic Analysis and Policy, 2022, 22 (3), 611-621

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Journal Article: Employment Protection, Workforce Mix and Firm Performance (2022)
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