Patterns of labor market reforms: a regional approach to the Italian Jobs Act

Abstract

After estimating the impact of wage subsidies and EPL reforms on open ended employment, we single out which macro characteristics are responsible for the variability of the estimated effects at the regional level. We find that the impact of incentives is higher where GDP and VA per head are higher, and the informal economy is limited. Instead, we do not find any heterogeneity and in most cases any impact for the EPL component. We conclude that regions with a stronger economy benefitted more from subsidies, which might exacerbate territorial inequality.