Institutional Rigidities and Employment Rigidity on the Italian Labour Market

  1. Jiménez-Rodríguez, Rebeca 2
  2. Russo, Giuseppe 1
  1. 1 University of Salerno
    info

    University of Salerno

    Fisciano, Italia

    ROR https://ror.org/0192m2k53

  2. 2 Universidad de Salamanca
    info

    Universidad de Salamanca

    Salamanca, España

    ROR https://ror.org/02f40zc51

Revista:
Applied Economics Quarterly

ISSN: 1611-6607,  1865-5122

Año de publicación: 2008

Volumen: 54

Número: 3

Páginas: 217-227

Tipo: Artículo

DOI: 10.3790/AEQ.54.3.217 GOOGLE SCHOLAR

Otras publicaciones en: Applied Economics Quarterly

Resumen

A well-established result in the theoretical literature on labour market flexibility is that the employment should be more volatile in “flexible” labour markets. Over the last 35 years, Italy gives a good example of a transition from an over-regulated labour market into a quite more flexible one. According to the theory, the deregulation is expected to increase the employment variance. Despite the anecdotal evidence reported in the press, the literature hardly finds any evidence for such an effect. This paper exploits time-series of several employment indicators since 1980, allowing us to compare decades with different labour market regulation. All the considered series show evidence of a structural break with an increase in their variance after the deregulation, confirming the expected pattern. This gives some support to the concerns for increased job insecurity.