PT  - JOURNAL ARTICLE
AU  - Francesconi, Marco
AU  - Sonedda, Daniela
TI  - Does Weaker Employment Protection Lower the Cost of Job Loss?
AID  - 10.3368/jhr.0725-14408R2
DP  - 2026 Jul 13
TA  - Journal of Human Resources
PG  - 0725-14408R2
4099  - http://jhr.uwpress.org/content/early/2026/07/02/jhr.0725-14408R2.short
4100  - http://jhr.uwpress.org/content/early/2026/07/02/jhr.0725-14408R2.full
AB  - Leveraging a major Italian reform enacted in July 2012 that eroded employment protection to workers on permanent contracts, we use detailed worker level administrative data to estimate how this reduction affected the cost of job loss. We employ a stacked event-study research design, comparing treated and untreated workers as they move from employment into nonemployment. Weakening employment protection led to additional penalties in terms of lower re-hiring earnings and lower re-employment probabilities. Heterogeneous effects of the reform deepened pre-existing divides, penalizing labor market outsiders, such as young workers, and curbing employment opportunities for individuals in poorer regions, such as the South.