The Italian programme "Liste di Mobilità": An analysis of the impact of its 'passive' component

“Liste di mobilità” (LM) is an Italian labour market programme introduced in the early Nineties to handle redundancies in the labour market. The programme includes both a passive and an active component. The duration of eligibility depends on the age of the worker at dismissal while the benefits the worker is entitled to depend on the size of the dismissing firm. The passive component grants monetary benefits with a high replacement rate, but only to workers who have been dismissed by firms larger than 15 employees and according to their age at dismissal. Besides, there is an active component providing any firm hiring dismissed workers from the LM either on a permanent or on a temporary contract with an employment subsidy (a substantial reduction in social security contributions (SSCs) plus 50% of the residual benefits the worker would have received had s/he remained unemployed).

Using panel data, we identify the impact of extended duration of eligibility, according to age of the worker at dismissal, on re-employment probabilities and wages, via Regression Discontinuity Design. We validate the design by a set of overidentification tests. For most subgroups we find no significant impact, with a peculiar pattern for women entitled to monetary benefits. A major negative impact emerges for workers aged 50 or more granted monetary benefits, likely due to the fact that they can use the programme as a bridge to retirement. Further research in going on the differential effect of having been dismissed by a large or a small firm, that is by eligibility to the passive component.

Nadir Zanini and Adriano Paggiaro (University of Padua) are also involved in the project.