Abstract
Abstract We analyze the effects of Italian labor market reforms โat the marginโ on the probability of exiting from non-employment and entering permanent and temporary contracts, using WHIP data for the period 1985โ2004. We find that the reforms have strengthened the duration dependence parameter, meaning a stronger labor market gap in employment opportunities between the short- and long-term non-employed. We suggest that in a flexible labor market, long-term unemployment is used by firms as a screening device to detect less productive workers. We also find evidence of greater differences in employment opportunities according to gender, and of reduced differences between regional labor markets.
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