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Raffaele Saggio (UBC, Princeton)

March 11 @ 12:00 - 13:15

 

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Details

Date:
March 11
Time:
12:00 - 13:15
Event Category:
Academic Events

“The Effects of Partial Employment Protection Reforms: Evidence from Italy”

Abstract
We combine matched employer-employee data with firm fi nancial records to study a 2001 Italian reform that lifted constraints on the employment of temporary contract workers while maintaining rigid employment protection regulations for employees hired under permanent employment contracts. Exploiting the staggered implementation of the law across different collective bargaining agreements, we find that the reform led to an increase in the incidence of temporary contracts but failed to raise employment signi cantly and lowered the earnings of new entrants. By contrast, the reform was successful in decreasing fi rms’ labor costs, leading to higher profi tability, some gains in managerial pay, and a rise in within-fi rm earnings inequality. Our findings suggest that the main bene ciaries of this “partial reform” to employment protection were firms, managers, and older incumbent workers. Rentsharing estimates show that workers on a temporary contract receive only 66% of the rents shared by fi rms with workers hired under a permanent contract.