Measuring the impact of the Italian CFL programme on the job opportunities for the youths

The CFL programme has been introduced in 1985 to improve the youths occupational chances. It provides the employers some incentive to recruit young workers by reducing both the labour and the firing costs relative to those they would bear by recruiting older workers. Following the literature, the expected impact of the programme is to increase the eligibles chance to work during the eligibility period as well as to improve their chance to work after the eligibility period thanks to the longer work experience obtained during the eligibility period. A substitution effect might emerge since as subjects get out of eligibility employers might find convenient to replace them by younger still eligible workers. To measure the impact of the programme we exploit the variation over time and across geographical areas of the incentive to hire eligible workers induced by several reforms of the programme as well as its interaction with other incentive schemes.targeted wage subsidy, firing costs, substitution effect

Safari nella giungla dei salari. Nel Mezzogiorno si lavora di meno?

The Italian debate on the wage differentials between Northern and Southern Italy has recently moved its research focus from "what is the dimension of the gap" to "how the gap can be measured - what kind of data are needed". Some authors argue that the use of administrative data, based on firm declarations, may yield biased results in the comparative analysis af wage differentials. The point is that the behaviour of Southern firms lead to overestimate the daily wages: firms underreport the number of working days in order to achieve two targets: 1) increase the level of the daily wage in order to the above the minimum contractual wage; 2) reduce the social security contributions and thereby the Labor cost, calculated on the basis of daily wages. The aim of this paper is to test empirically these propositions, using a large employer-employee linked longitudinal panel drawn from the national social security archives (Inps). We find that full-time Southern employees work fewer than Northern employees. If we look at full-time stayers - workers employed by the same firm during all year - we find that among them the number of working days - for the same number of paid months - is much lower for Southern employees. These results confirm the hypothesis that the wage gap expressed in daily or monthly pay from Inps data, is seriously underestimated. Is there a solution? Our proposal is abstract from any consideration about firm behaviour and measure the wage differential only on "stayers" who report al least 287 working days. For these workers the problem of incorrect reporting is minimal.