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Quality & Quantity

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16.03.2017

Do institutions affect the matching process of disabled people? The Italian case

verfasst von: Massimiliano Agovino, Antonio Garofalo, Katia Marchesano

Erschienen in: Quality & Quantity | Ausgabe 2/2018

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Abstract

The aim of this paper is to investigate whether the various Italian regions’ efficiency in providing employment for disabled people under Law 12 March n.68 1999, “Regulation on the right to work of disabled people” (Law 68/99) can be affected by their institutional quality. For this reason, a Stochastic Frontier Approach is used for estimating the regional matching function, where the flow of disabled people who found a job is produced by the combination of unemployment and vacancies. The matching equation is estimated using regional data from ISFOL, from 2006 to 2011. Results show the presence of a territorial dualism with regard to the matching process. The Southern regions of Italy have the lowest efficiency scores due to their lower institutional quality. The empirical analysis confirms that a good institutional quality is able to reduce the inefficiency of the matching process of disabled people. Therefore, it requires the implementation of policies aimed at improving the level of institutions, particularly in Southern Italy, in order to improve the efficiency of Law 68/99.

Vorheriger Artikel Comparing survey data with an official administrative population: assessing sample-selectivity in the IAB Establishment Panel

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The labour market institutions determine the incentives and the capabilities of economic agents (see Blanchard and Wolfers 2000); i.e., generous unemployment benefits relative to wage income may reduce incentives to search for job opportunities and, therefore, increase the labour market imbalances. In fact, in the case of DP, Agovino and Garofalo (2014) suggest to reduce access to passive labour market policies (e.g., civilian disability pensions received by DP who are of working age), whose abuse increases the risk of poverty and social exclusion, and to promote access to active labour market policies, because of their ability to promote both social and economic integration of DP.

The quality of institutions is measured in this paper by the Institutional Quality Index (IQI) elaborated by Vecchione and Nifo (2014). The items of IQI concern major dimensions of institutional quality: i) Voice and Accountability (the degree of freedom of press and association); ii) Government Effectiveness (the quality of public service and the policies formulated and implemented by the local government); iii) Regulatory Quality (the ability of government to promote and formulate effective regulatory interventions); iv) Rule of Law (the perception concerning law enforcement both in terms of contractual fulfilment, property rights, police forces, activities of the magistracy and crime levels); v) Control and Corruption (the degree of corruption of those performing public functions both in terms of illegal gains and private proceeds acquired to the detriment of society). The IQI is the index of regional institutions which, by construction, assumes values in the range [0,1] (for more detail see https://sites.google.com/site/institutionalqualityindex/dataset).

Namely high corruption, excessive bureaucracy, inefficient organization of public services, a low endowment of infrastructure and a lack of security.

North-West shows a sudden drop of the matching rate, which probably reflects the increase in the labour tension in the Liguria Region (see Fig. 1).

Evidence suggests that their employment rates are more adversely affected during economic downturns. Results from country-specific analysis show that a recession hits disabled people harder than people without disability. Burkhauser and Daly (2001), for example, examined the relative outcomes of workers with disability over the business cycles of the 1980 s and the 1990 s in the United States, and concluded that employment fell more for people with disability than for those without disability. Similarly, for the United Kingdom, Balloch (1985) showed that employment opportunities for people with disability decreased during the recession of the 1980s.

These results are common in the labour market not governed by law 68/99: the South has higher unemployment rates than the number of vacancies for non-disabled people (see Destefanis and Fonseca 2006; Altavilla and Caroleo 2013).

This problem is known in the empirical literature as the “incidental parameters problem”.

In particular, ISFOL provides the regional details on unemployment, vacancies and matches for disabled people only from 2006 onwards (Ministry of Employment, 2006–2007, 2008–2009, 2010–2011).

According this article (Article 3 of Law 68/999), both public and private employers are obliged to employ workers with disabilities, in proportion to their size. In particular, the employer is obliged to have a reserve shares of:

one disabled worker if the firm has a number of employees ranging from 15 to 35;
two disabled workers if the number of employees ranges from 36 to 50;
7% of workers if the number of employees is more than 50.

It can certainly be said that the implementation of services offered to the targeted employment found a brake in the concurrent reorganization of employment services (Legislative Decree n. 469/97) began in the 1990 s and is not yet complete.

Article 13 of Law 68/99 provides that employers have access to forms of economic incentives for hiring DP. These incentives are provided via allowances allocated to regions by the National Fund For The Right to work of DP. The total budget allocated for the years 2008-2010 was euro 12 million. In 2010, we have seen a reduced of transfers of euro 4 billion in all regions. The year 2011, then has not seen a transfer of resources from the Fund for the hiring DP that took place in 2010.

The public and private companies (with more than 35 employees) may apply for exemption from recruitment if their job position is: (a); hard, (b) dangerous (for example for the environmental conditions of work place); c) requires special procedures. Exempt firms must pay to the Regional Fund for the employment of disabled people a daily tax of euro 30.64 (cost of discharging) for each DP not hired.

In many European countries, the portability of personal assistance is also hampered by complex administrative systems. In fact, in thirteen European countries (Spain, Norway, Finland, Germany, the Netherlands, Sweden, Denmark, Ireland, Latvia, Lithuania, Italy, the Czech Republic and Belgium), benefits and arrangements are not portable between different states or regions of the country (Eichhorst et al. 2010).

Effective institutions have a number of positive impacts on the competitiveness of a Country. In particular, in an overview of the literature on the subject, Rodriguez-Pose (2010) points out that they improve the provision of public goods, address market failures, improve efficiency (Streeck 1991), reduce transaction costs (North 1990), foster transparency (Storper 2005), promote entrepreneurship and facilitate the functioning of labour markets. Effective local institutions provide the adequate conditions for investment, economic interaction and trade, while reducing the risk of social and political instability (Jütting 2003).

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Titel: Do institutions affect the matching process of disabled people? The Italian case
verfasst von: Massimiliano Agovino
Antonio Garofalo
Katia Marchesano
Publikationsdatum: 16.03.2017
Verlag: Springer Netherlands
Erschienen in: Quality & Quantity / Ausgabe 2/2018
Print ISSN: 0033-5177
Elektronische ISSN: 1573-7845
DOI: https://doi.org/10.1007/s11135-017-0496-5

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