Measurability of Employment Protection Systems

Bocconi Legal Studies Research Paper No. 06-03

Politica Economica, No. 3, 2004

25 Pages Posted: 14 Nov 2004

See all articles by Maurizio Del Conte

Maurizio Del Conte

Bocconi University - Department of Law

Carlo Devillanova

Bocconi University - Department of Policy Analysis and Public Management

Stefano Liebman

Bocconi University - Department of Law

Silivia Morelli

Bocconi University

Abstract

The paper analyses the method adopted by the index of employment protection systems developed in 1999 by the OECD and discusses its reliability and shortcomings, in particular with regards to Italy.

The paper highlights a series of problems of method arising from the aggregation of the respective indexes. It underscores the arbitrariness of weightings attributed and casts doubt on the possibility of developing an aggregate index generated as sum total of partial indexes. The paper finds a series of errors and imprecisions in the development of the index in Italy, in the light of an accurate reading of legal data as well as by scrutiny of court practice. The greater inaccuracies regard the index of rigidity attributed to legal provisions applicable to employment termination indemnities, individual dismissal, lay off and unemployment extraordinary benefits.

Re-examination of legal data has led to a substantial downgrading of Italy's labour market rigidity index. Yet, the most significant finding is the extreme volatility of the index according to the divers interpretations given to legal data and the peculiarities of the labour market in Italy. This observation is fraught with consequences regarding proper application of information provided by the rigidity index. In particular, an OECD index adjusted by factoring in the points developed in this paper would only reflect accurately some of the innumerable situations provided for at law. Any attempt to make it reflect the overall Italian labour market would be bound to fail.

This case study enables the authors to draw general conclusions on the pitfalls inherent to the development of synthetic indexes of employment protection systems based on sole review of legal documents and at the expense of legal practice in the field, and neglecting contextualization by the respective economic realities.

Keywords: Employment protection, dismissal law, temporary work, comparative law, econometrics, OECD index, severance pay, labour market

JEL Classification: C10, C31, C50, C51, J21, J30, K00, K10, K31

Suggested Citation

Del Conte, Maurizio and Devillanova, Carlo and Liebman, Stefano and Morelli, Silivia, Measurability of Employment Protection Systems. Bocconi Legal Studies Research Paper No. 06-03; Politica Economica, No. 3, 2004. Available at SSRN: https://ssrn.com/abstract=617941

Maurizio Del Conte

Bocconi University - Department of Law ( email )

Via Roentgen, 1
Milan, 20136
Italy

Carlo Devillanova

Bocconi University - Department of Policy Analysis and Public Management ( email )

Via Roentgen 1
Milan, 20136
Italy

Stefano Liebman (Contact Author)

Bocconi University - Department of Law ( email )

Via Roentgen, 1
Milan, 20136
Italy

Silivia Morelli

Bocconi University ( email )

Via Sarfatti 25
20136 Milan, MI 20136
Italy

Register to save articles to
your library

Register

Paper statistics

Downloads
226
Abstract Views
2,615
rank
136,504
PlumX Metrics