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The effect of a mixed passive and active labour market policy: Evidence from an Italian programme for dismissed workers

Gianluca Mazzarella,
Enrico Rettore,
Ugo Trivellato,
Nadir Zanini

Liste di Mobilità (LM) is an Italian labour market programme targeted to dismissed workers. It combines an active component for all dismissed workers and a passive one to which only workers dismissed by firms with at least 16 employees are entitled; besides, 50% of the residual passive component the worker would have received had s/he remained unemployed is transferred to any firm hiring him/her from the LM. Exploiting a unique panel data set, we identify the causal effect of being eligible for the latter mixed passive and active component on short to mid-run labour market outcomes, via a fuzzy Regression Discontinuity Design. We validate the design by a set of over-identification tests. We find evidence of a negative effect of this component of the program on the short- to mid-run re-employment probability even if it is robust to alternative specification of the estimator only for middle-age women.

Labour market policies,
Regression discontinuity design,
Unemployment subsidy,
Wage subsidy
JEL classification: 
C31, J38, J65, J68
Rassegna Italiana di Valutazione - (58) 2014
Franco Angeli
December, 2014