Opting Out, Collective Contracts and Labour Flexibility: Firm‐Level Evidence for The Italian Case

Abstract

AbstractThis article analyses the role of deviations from higher level collective agreements adopted in firm‐level bargaining to regain higher labour mobility, net positive employment effects and a resurgence of labour productivity. Using Italian firm‐level data, after performing preliminary pooled ordinary least squares and fixed effects estimates, we adopt a difference‐in‐difference approach combined with a propensity score matching. All the estimations show that opting out clauses notably increases both hiring and separations, but without significant variations in terms of net employment. In addition, no significant labour productivity gains are obtained. The only significant change concerns the increase in the share of temporary workers.