TY  - RPRT
        AU  - Leonardi, Marco
AU  - Pica, Giovanni
        TI  - Who Pays for It? The Heterogeneous Wage Effects of Employment Protection Legislation
        PY  - 2010/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 5335
        UR  - https://www.iza.org/publications/dp5335
        AB  - Theory predicts that the wage effects of government-mandated severance payments depend on workers' and firms' relative bargaining power. This paper estimates the effect of employment protection legislation (EPL) on workers' individual wages in a quasi-experimental setting, exploiting a reform that introduced unjust-dismissal costs in Italy for firms below 15 employees and left firing costs unchanged for bigger firms. Accounting for the endogeneity of the treatment status, we find that high-bargaining power workers (stayers, white collar and workers above 45) are almost left unaffected by the increase in EPL, while low-bargaining power workers (movers, blue collar and young workers) suffer a drop both in the wage level and its growth rate.
        KW  - endogeneity of treatment status
KW  - policy evaluation
KW  - severance payments
KW  - costs of unjust dismissals
        ER  -