2016
DOI: 10.2139/ssrn.2772536
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Hiring Incentives And/Or Firing Cost Reduction? Evaluating the Impact of the 2015 Policies on the Italian Labour Market

Abstract: In 2015 Italy adopted two different policies aimed at reducing labour market dualism and fostering employment: a generous permanent hiring subsidy and new regulations lowering firing costs and making them less uncertain. Using microdata for Veneto and exploiting some differences in the design of the policies, we evaluate the impact of each measure. Both contributed to double the monthly rate of conversion of fixed-term jobs into permanent positions. Moreover, around 40 per cent of new total gross hires with pe… Show more

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Cited by 22 publications
(24 citation statements)
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References 15 publications
(11 reference statements)
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“…The combination of the two measures, have had a positive effect in reducing labour market duality: data released by INPS show that since 2015 open-ended contracts have grown much more than short-term contracts (Figure 30). Sestito and Viviano (2016) show however that the observed shift towards open-ended hires was mostly attributable to the social security contribution exemptions rather than the new rules on individual dismissals. Also, the social security contribution exemption is a 24.…”
mentioning
confidence: 80%
“…The combination of the two measures, have had a positive effect in reducing labour market duality: data released by INPS show that since 2015 open-ended contracts have grown much more than short-term contracts (Figure 30). Sestito and Viviano (2016) show however that the observed shift towards open-ended hires was mostly attributable to the social security contribution exemptions rather than the new rules on individual dismissals. Also, the social security contribution exemption is a 24.…”
mentioning
confidence: 80%
“…Assessment of the success of the new law is necessarily still preliminary. Using microdata for Veneto, Sestito and Viviano (2016) conclude that the two measures contributed to double the monthly rate of conversion of fixedterm jobs into permanent positions. However, around 40 per cent of the new total gross hires with open-ended contracts occurred because of the incentives, whereas 5 per cent can be attributed to the new firing regulations.…”
Section: The Construction Of a Dualistic Labour Marketmentioning
confidence: 94%
“…6). In Italy, building upon earlier, more partial reforms, the recent 'Jobs Act' stipulated that employers no longer have to reinstate workers dismissed for invalid economic reasons; whereby this reform was combined with strong employer incentives for new hirings on openended contracts, including conversions from temporary to permanent contracts, but falling short of a single type of contract removing the distinction between permanent and temporary types of employment (Picot and Tassinari 2015;Sestito and Viviano 2016). In Spain, dismissals were facilitated by extended and clarifying the reasons for separation as well as limiting severance pay through the 2010 and 2012 reforms, while strengthening the employment protection of temporary workers and encouraging internal flexibility.…”
Section: Dismissal Protection Reformmentioning
confidence: 99%
“…Using most recent regional data from the Italian region of Veneto to analyse the effect of the Jobs Act, Sestito and Viviano (2016) show that the 2015 reform combining reduced dismissal costs and regulatory uncertainty with relatively generous hiring incentives regarding the employment of permanent workers has changed firm behavior in the expected direction, departing at least to some extent from hiring and firing concentrated among temporary employees (see also Gama et al 2015).…”
Section: Temporary Employmentmentioning
confidence: 99%