THEORY AND PRAXIS OF INCENTIVES

IN ITALIAN LABOUR LAW HYSTORY AND REGULATION

Problems and premises
The current economic crisis has severely imposed a general rethink of several
categories of the Western world. One of the most critical questions is tackling
unemployment, especially with regard to young people.
In particular, it has been argued that the traditional values and principles of labour law are no
longer valid and useful in order to ensure not only an adequate, but also a minimum level of
employability. This is true in a peculiar way in respect of those countries, such as Italy, where
the labour market has been weak even before this crisis.
In this context, it is necessary for the legislator and so for the policy makers to
adopt structural measures rather than contingent and, in order to do so, the economic analysis
of law can play a big role. This multilateral approach connects legal provisions and economic
aspects: in its modern conception, it is focused on the incentives that derive from certain
norms or legal systems or others on wealth and growth. If we look at Italian history under the
light of the incentives connected to the labour market and, more generally, to the
development of the welfare state model, we can draw a dynamic picture of a country, which
is (or should be) constitutionally founded on labour, while this labour now lacks,
unemployment is at its highest level and the call for incentives is strikingly pressing.
These considerations lead us to ask what the meaning of being a republic founded on
labour is today and what is the room for labour law to intervene as rationale of our state, in
such a basilar and constructive way.
Research questions
Thus, the notion of incentive and its features matters preliminarily. What are the
operational effects of different types of incentives among society?
For example, Marco Biagi has sustained that no economic incentive can balance a
legal disincentive1: it is important to verify whether or not this assertion can be shared and
confirmed nowadays, because from the answer, positive or negative different
consequences are to be drawn.
So, firstly, a look back into the development of labour law, intended as the entire
amount of legal instruments made available by the government such as different individual
contracts and rights, collective agreements, forms of protection against dismissal, models of
companies corporate structure, etcetera will be made, in order to understand which
incentives have already been used and how.

1

This statement has been affirmed in several conferences and essays; it has been reported by
TIRABOSCHI M., Morte di un riformista. Marco Biagi, un protagonista delle politiche del lavoro nei
ricordi di un compagno di viaggio, Venezia, 2003, and in the preface of a publication of the Ministry
of Labour and Social Policies, Piano triennale per il lavoro. Liberare il lavoro per liberare i lavori,
30 luglio 2010.

Secondly, after this historical and objective overview, a subjective perspective is

fundamental for giving a clear explanation of the effects produced over time by the labour
law. Beneficiary, or almost recipient, of labour legal provisions is potentially everybody,
every person capable to work; also the specific qualification of the worker herself is the result
of a choice previously made by the legislator, which identify some as businessmen, some
others as employers or employees, others as freelancer or self-employed people. In this sense,
incentives operate in two different directions or moments:
(i)
when persons decide what job they should do;
(ii)
when persons, while they are working, decide how they should do their job.
Moving from theory to praxis, a recent, new and young subject for incentives is the
so-called startup, a new undertaking that starts its activity in sectors with a strong
innovative potential. In this case, it is possible to find all the elements needed to test if the
actual intervention of the legislator is labour-driven or not, labour-founded or not, and so
taking this reasoning to its extreme conclusions constitutional or not.
Purposes
This research aims to demonstrate the intimate linkage that exists between labour and
incentives. It could seem to be an ordinary and obvious relationship, but this is false. In fact,
especially if labour legislation is assessed with the instruments and categories of economic
analysis of law, evidence of the extremely qualified type of relation between these two
elements is offered.
When labour is involved, it is not possible to separate the actions and choices of
single workers from the incentives they obtain for their life through their respective jobs.
Every problem and deficiency of Italian labour legislation, as correctly identified by the
majority of authors among time, is substantially to the detriment of principally one thing:
motivation, which is the real cause of good quantity and quality of work for human being.
Recently, a famous study has envisaged that today geography matters more than you
2
cv , because growing differences in cities and regions have led to consequent heavy
differences in the level of employment that characterized respectively those zones. The
output of this research, from one hand, agrees with this reconstruction, but, from the other
hand, overtakes its results and argues that the only way to guarantee the stable growth of the
employment is to provide the right legal incentive, instead to search the best workplace at all.

2
These considerations are based on numbers and data collected having regard of the US, but the
concept has been extended and applied also to Western countries and Italy. For further information, see
MORETTI E., The New Geography of Jobs. Berkeley, 2013,