Does Rising Unemployment Lead To Policies Of Labour Flexibility? The Italian Case (1990 – 2013)

This paper deals with the relation between labour market deregulation and the path of employment in Italy. A preliminary reconstruction of the theoretical debate is provided, based on the different views advocated by Neoclassical and post-Keynesian scholars. The second part of this paper focuses on...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Authors Guglielmo Forges Davanzati, Mongelli, Lucia
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2017
Subjects
Flexibility
Labor market
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Summary:This paper deals with the relation between labour market deregulation and the path of employment in Italy. A preliminary reconstruction of the theoretical debate is provided, based on the different views advocated by Neoclassical and post-Keynesian scholars. The second part of this paper focuses on empirical evidence, concluding that the increase in labour flexibility negatively affected the employment rate in the 2000s. Moreover, it is argued that as unemployment increases, workers’ bargaining power decreases not only in the labour market but also in the political arena,allowing the Government to implement further policies of labour flexibility. The evidence confirms this conjecture.