18 Pages Posted: 7 Jun 2013
Date Written: June 2013
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.
Keywords: employment protection legislation, firm expansion, irregular employment, Italy, labour regulation
JEL Classification: D21, J00, K31
Suggested Citation: Suggested Citation
Melchiorre, Matthew M. and Rocca, Emilio, The Unintended Consequences of Italy's Labour Laws: How Extensive Labour Regulation Distorts the Italian Economy (June 2013). Economic Affairs, Vol. 33, Issue 2, pp. 156-173, 2013. Available at SSRN: https://ssrn.com/abstract=2275731 or http://dx.doi.org/10.1111/ecaf.12012
This is a Wiley-Blackwell Publishing paper. Wiley-Blackwell Publishing charges $38.00 .
File name: ecaf12012.
If you wish to purchase the right to make copies of this paper for distribution to others, please select the quantity.