Enforcement of Employment Protection and the hiring behaviour of firms. Evidence from a large Italian region

Elisabetta Trevisan ()

No 2008_25, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: This paper investigates the effect of the Employment Protection Legislation (EPL) on the hiring behaviour of the firms when the level of EPL is differentiated by firms size. In this respect, Italy represents an interesting case because workers hired by bigger firms enjoy a stronger protection than workers hired by small firms; the threshold size is fixed by law at 15 employees. A model derives the conditions under which firms decide whether to upsize or not and, in case of upsizing, whether to hire temporary (i.e. workers who are not counted in the threshold, as apprentices in Italy) or permanent workers. The model has been tested using data drawn from the VWH (Veneto Workers History) registered data for firms and workers, from 1982 to 1997, for a large Italian region (i.e. Veneto). Firms close to the threshold are not scared to growth but they are more likely to hire apprentices than permanent workers.

Keywords: Employment Protection; Hiring; Random Effects; Regression Discontinuity Design. (search for similar items in EconPapers)
JEL-codes: C21 C23 J21 (search for similar items in EconPapers)
Pages: 31
Date: 2008
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ven:wpaper:2008_25

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