Ricerc@Sapienza

The research here proposed consists in the evaluation of the impact of Law 407/90, and of its end, on hirings of long-term-unemployed. The afore-mentioned policy was implemented from 1990 to 2014 in Italy and consisted, among other things, in tax credits to employers hiring long term unemployed with a permanent contract. Even though the evaluation of an ended law may appear anachronistic, it isn't. Indeed, its end is highly informative, for multiple reasons. Its analysis would give a contribution to recent debates on italian labour policies, to the literature on labour and to counterfactual methods.

Its contribution in the first mentioned field, would consist in additional information on 2015 Legge Stabilità. Indeed, this law mandated the end of Law 407/90. Hence its consequences can be ascribed to the 2015 policy. To our knowledge, this would be the first quantitative and reliable study focusing on this aspect of 2015 Legge Stabilità.
The contributions of this study in the second field would be multiple. It would give a contribution to the literature on wage subsidies to targeted groups of unemployed. Indeed, this would be the first study about law 407/90, and in general about a policy targeting long-term unemployed implemented in Italy. The second contribution to literature on labour, concerns the estimation of the stigma affecting long term unemployed. According to theoretical literature, most of the duration dependence in unemployment is due to the stigma affecting them. Using a counterfactual model and exploiting the fact that the end of the law corresponded with the implementation of a law which generalized wage subsidies to all workers, we would be able to identify and estimate the stigma using an approach that has never been used before. This would require the implementation of an innovative methodology as well. In particulair, a variation of usual duration dependence models would be implemented.