Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/62510
Authors: 
Prifti, Ervin
Vuri, Daniela
Year of Publication: 
2012
Series/Report no.: 
Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6608
Abstract: 
The aim of this paper is to investigate the effect of Employment Protection Legislation (EPL) on fertility decisions of Italian working women using administrative data. We exploit a reform that introduced in 1990 costs for dismissals unmotivated by a 'fair cause' or 'justified motive' in firms below 15 employees and left firing costs unchanged for bigger firms. We use this quasi-experimental setup to study the hypothesis that increased EPL reduces future job insecurity and positively affects a female worker's proneness to take childbearing decisions. We use a difference in difference (OLS-DID) model to control for possible period-invariant sorting bias and an instrumental variable (IV-DID) model to account for time-varying endogeneity of the treatment status. We find that reduced economic insecurity following a strengthening of the EPL regime has a positive and sizable effect on fertility decisions of Italian working women. This result is robust to a number of checks regarding possible interactions with other policy reforms occurring around 1990, changes in the sample of workers and firms, and use of an alternative set of exclusion restrictions.
Subjects: 
fertility
employment protection
difference-in-difference
instrumental variables
policy evaluations
JEL: 
J2
J13
J65
Document Type: 
Working Paper

Files in This Item:
File
Size
425.08 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.