TY  - RPRT
        AU  - Berton, Fabio
AU  - Devicienti, Francesco
AU  - Grubanov-Boskovic, Sara
        TI  - Employment Protection Legislation and Mismatch: Evidence from a Reform
        PY  - 2017/Jul/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 10904
        UR  - https://www.iza.org/index.php/publications/dp10904
        AB  - Liberalization of temporary contracts has been a hallmark of labor market reforms during the last decades. More recently, factors like the sovereign debt crisis pushed the most indebted countries to unprecedented reductions of employment protection legislation (EPL) also on open-ended contracts. These policies are justified under the assumption that EPL harms the allocation of workers on the jobs where they are most productive. How EPL affects the quality of job matches is nonetheless an underexplored issue. 
In this paper, we provide new evidence that exploits exactly one of these recent reforms, the so-called Fornero Law, introduced in Italy in 2012 in the background of austerity reforms. Results show that good matches have increased. Further, the reduction in EP favored labor reallocation. Eventually, it was also followed by an increase in productivity, albeit small. While the results are consistent with the economic theory that informed deregulation, we highlight caveats and limitations.
        KW  - productivity
KW  - mismatch
KW  - turnover
KW  - employment protection legislation
KW  - Fornero Law
KW  - difference-in-differences
        ER  -