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

Author(s): 
Gianluca Mazzarella,
Enrico Rettore,
Ugo Trivellato,
Nadir Zanini
Abstract: 

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.

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