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The Unintended Consequences of Italy's Labour Laws: How Extensive Labour Regulation Distorts the Italian Economy

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  • Matthew Melchiorre
  • Emilio Rocca

Abstract

Simple solutions to complex problems often have unintended and undesirable consequences. An example is Italy's approach to combating unemployment. Rigid laws designed to protect the employed perversely discourage businesses from hiring and people from working. They also encourage precarious temporary employment among young people, informal work, and under‐the‐table deals that compromise worker benefits. The numbers of Italy's unemployed and of those outside the workforce are much higher than official estimates suggest. Italy's employment protection legislation – arguably the most restrictive in Europe – creates that which it seeks to prevent: the insecurity of unemployment.

Suggested Citation

  • Matthew Melchiorre & Emilio Rocca, 2013. "The Unintended Consequences of Italy's Labour Laws: How Extensive Labour Regulation Distorts the Italian Economy," Economic Affairs, Wiley Blackwell, vol. 33(2), pages 156-173, June.
    • Handle: RePEc:bla:ecaffa:v:33:y:2013:i:2:p:156-173
    DOI: 10.1111/ecaf.12012
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    References listed on IDEAS

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    1. repec:rim:rimpre:15_01 is not listed on IDEAS
    2. Gianluigi Pelloni & Marco Savioli, 2014. "Why is Italy doing so badly after doing so well?," Professional Reports 02_14, Rimini Centre for Economic Analysis.
    3. Gianluigi Pelloni & Marco Savioli, 2015. "Why Is Italy Doing So Badly?," Economic Affairs, Wiley Blackwell, vol. 35(3), pages 349-365, October.

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