Edited by Ramón Gómez-Salvador, Ana Lamo, Barbara Petrongolo, Melanie Ward and Etienne Wasmer
Jan C. van Ours The chapter ‘Hiring incentives and labour force participation in Italy’ by Piero Cipollone, Corrado Di Maria and Anita Guelﬁ addresses the issue: to what extent marginally attached workers react to an increase in labour demand. The issue is policy relevant since marginally attached workers do not show up in unemployment statistics, but they do aﬀect the way unemployment reacts to labour demand. If labour demand goes up, marginally attached workers enter the labour force and cause the decline in unemployment to be smaller than the increase in the number of jobs. To my knowledge there has not been a lot of research done on marginally attached workers. By nature it is diﬃcult to investigate the behaviour of this type of worker; it is also not easy to distinguish the eﬀect of a labour demand shock from the eﬀect of other simultaneous changes in the economy. In their analysis the authors use information about the eﬀects of an Italian policy measure where labour costs for one category of workers were reduced through a tax credit, while for other categories of workers there was no change in labour costs. They exploit this information as if it was a ‘natural experiment’. By studying the diﬀerences in labour force participation between the reduced labour costs category and the other categories, conclusions can be drawn about the eﬀect of the tax credit on labour force participation. My comments focus on the empirical part of...
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