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EnglishLabor market reforms increasing flexibility “at the margin” have been recently paying out in terms of employment growth. This paper argues that two-tier labor market reforms have a transitional “honeymoon”, job creating effect. In a dynamic model of labor demand under uncertainty, the paper predicts that in the aftermath of reforms, beyond an increase in employment, there should be a reduction in “employment inaction” and in the mean and cross sectional variance of labor productivity. Based on a variety of firm-level data on Italy in the period 1995-2000, we find evidence of our empirical implications.
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| Titolo: | Two-tier Reforms of Employment Protection: A Honeymoon Effect? | |
| Data di pubblicazione: | 2007 | |
| Autori: | ||
| Autori: | Boeri, TITO MICHELE; Garibaldi, Pietro | |
| Rivista: | ECONOMIC JOURNAL | |
| Abstract: | Labor market reforms increasing flexibility “at the margin” have been recently paying out in terms of employment growth. This paper argues that two-tier labor market reforms have a transitional “honeymoon”, job creating effect. In a dynamic model of labor demand under uncertainty, the paper predicts that in the aftermath of reforms, beyond an increase in employment, there should be a reduction in “employment inaction” and in the mean and cross sectional variance of labor productivity. Based on a variety of firm-level data on Italy in the period 1995-2000, we find evidence of our empirical implications. | |
| Appare nelle tipologie: | 01 - Article in academic journal / Articolo su rivista scientifica |
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