Essays in empirical labor economics

Abstract

In the first chapter of my thesis I study the effect of firing costs and labor reallocation. Exogenous variation of expected firing costs is offered by the random allocation of judges to trials involving firms in a large Italian court. Judges may be slow or fast and therefore firms experience randomly assigned shorter or longer trial lengths in an institutional context in which longer trials imply higher employment protection. I find that a 1% increase in expected firing costs induced by the past experience of a longer trial reduces the hazard of hiring or firing by 0.4% after the end of the trial. In the second chapter of my thesis I use administrative data from one large Italian court I quantify the extent to which lawyers can be held accountable for the slowness of Italian courts. Borrowing the methodology used in the analysis of employers-employees linked data, I estimate the contribution of unobservable time-invariant plaintiff and defendant lawyers' characteristics in explaining the variability of trials' length. I find that 27% of the variance in trials length is explained by unobservable time-invariant lawyers' characteristics. In the third chapter I study how tournaments may motivate workers to provide effort, yet differences in relative abilities may undermine the incentives of workers to exert effort. I use a novel data set from professional football competitions and find that differences in relative abilities are associated with lower effort exerted by players. In this empirical setting, effort and relative abilities are measured as, respectively, the distance covered on the pitch by football players and relative winning probabilities, the latter derived from betting odds of professional bookmakers. I find that larger differences in betting odds of opposing teams lead to less distance covered on the pitch.