Counterfactual impact evaluation of hiring incentives and EPL reduction on youth employment in Italy

This study uses a counterfactual approach based on administrative registry data to evaluate the impact on youth employment of two selected demand-side public policies implemented in Italy in 2015: a rebate of social security costs (Law 190/2014, art. 1, c. 118) and a reduction in the costs to employers of firing employees (D. lgs n. 23/2015 under Law 183/2014).

Our findings confirm the results of previous evaluation studies available in the literature and show that the introduction of the two policies had a positive impact on the share of new hires with an open-ended contract over the total employment contracts registered in 2015. Our estimates also reveal that the impact of the regulatory changes on the share of the workforce hired with an open-ended contract was greater for individuals aged 15-34 (an increase of +12%) than for the entire population (+9.9%). Finally, the positive impact is found to be smaller for eligible young women (+7.6%) than for eligible young men (+ 14.5%).