Autori
Leonardi, Marco
Pica, Giovanni
Cingano, Federico
Messina, Juliàn

Titolo
Employment protection legislation, capital investment and access to credit: evidence from Italy
Periodico
Ministero dell'Economia e delle Finanze. Dipartimento del Tesoro. Working paper
Anno: 2014 - Fascicolo: 4 - Pagina iniziale: 1 - Pagina finale: 32

This paper estimates the causal impact of dismissal costs on capital deepening and productivity exploiting a reform that introduced unjust-dismissal costs in Italy for firms below 15 employees, leaving firing costs unchanged for larger firms. We show that the increase in firing costs induces an increase in the capital-labour ratio and a decline in total factor productivity in small firms relative to larger firms after the reform. Our results indicate that capital deepening is more pronounced at the low-end of the capital distribution - where the reform hit arguably harder - and among firms endowed with a larger amount of liquid resources. We also find that stricter EPL raises the share of high-tenure workers, which suggests a complementarity between firm-specific human capital and physical capital in moderate EPL environments.



SICI: 1972-411X(2014)4<1:EPLCIA>2.0.ZU;2-6
Testo completo: http://www.dt.tesoro.it/export/sites/sitodt/modules/documenti_it/analisi_progammazione/working_papers/WP_N._4_-_2014.pdf

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