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Effects of Labour Market Flexibility in the Long Run: Evidence from the Italian Case (1977-2009)

Author

Listed:
  • Stefano Alderighi
  • Enrico Ivaldi
  • Riccardo Soliani

Abstract

The present paper studies whether labour market deregulation is correlated with employment creation in Italy and the decline of trade union power. Our hypothesis is that the correlation does not hold, and that flexible contracts facilitated the dichotomy between industry and tertiary, without causing it. To test it, we first apply principal component analysis, then regression. The hypothesis is almost always confirmed. Flexible contracts are not correlated with youth employment creation, whilst trade union decline is correlated with macroeconomic indicators different from flexible contracts. These interventions facilitated a process already underway, caused by a structural change in the production paradigm.

Suggested Citation

  • Stefano Alderighi & Enrico Ivaldi & Riccardo Soliani, 2014. "Effects of Labour Market Flexibility in the Long Run: Evidence from the Italian Case (1977-2009)," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 3, September.
    • Handle: RePEc:rar:journl:0287
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    More about this item

    Keywords

    Labour market; Labour flexibility; Trade unions; Unemployment; Italy; 1977-2009;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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