Hiring Incentives and Labour Force Participation in Italy

P. Cipollone, Corrado Di Maria, A. Guelfi

Research output: Contribution to journalArticlepeer-review


A long-standing economic tradition maintains that labour supply reacts to market tightness; its sensitivity to job quality has received less attention. If firms hire workers with both temporary and open-ended contracts, does participation increase when more permanent jobs are available? We investigate this relationship within a policy evaluation framework; in particular, we examine how labour supply reacted in Italy to a recent subsidy in favour of open-ended contracts. This subsidy increased labour force participation by 1.4% in 2001 and 2.1% in 2002. This increase was concentrated on males aged 35-54, with a low or at most a secondary schooling level.
Original languageEnglish
Pages (from-to)161-203
Number of pages43
JournalGiornale degli Economisti ed Annali di Statistica
Publication statusPublished - 2004


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