Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192919 
Year of Publication: 
2017
Series/Report no.: 
KOF Working Papers No. 433
Publisher: 
ETH Zurich, KOF Swiss Economic Institute, Zurich
Abstract: 
This paper tests the hypothesis that employment protection legislation (EPL) increases the incentives of firms to train their employees. The identification strategy uses a regression discontinuity design (RDD) that exploits exemptions of small firms from EPL. Using firm-level data from Finland and Italy in 2005 and 2010, we do not find empirical evidence that EPL increases the propensity to train or the intensity of firm-provided training. The estimates remain insignificant throughout and mostly have a negative sign. This result is supported in a heterogeneous treatment setting that exploits variation in sector-specific employment volatility. Hence, though the upper bounds of the estimates include economically significant effects, we conclude that EPL has no effect on training of small firms in Finland and Italy.
Subjects: 
Employment Protection
Training
Regression Discontinuity
Difference-in-Discontinuity
JEL: 
J24
K31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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