Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/307347 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11417
Publisher: 
CESifo GmbH, Munich
Abstract: 
Leveraging a major Italian reform enacted in June 2012 that eroded employment protection to workers on permanent contracts, we use detailed administrative data to estimate how this reduction affected the cost of job loss. We employ a stacked-by-event research design, which compares workers moving into nonemployment before and after the reform. Weakening employment protection led to additional penalties in terms of lower re-hiring earnings and lower re-employment probabilities. Heterogeneous effects of the reform deepened pre-existing divides, penalizing more, among others, young workers and workers living in the South.
Subjects: 
layoffs
employment protection
dual labor markets
difference-in-differences
Italy
JEL: 
J63
J65
J30
J41
J68
Document Type: 
Working Paper
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