required severance pay to employees with ten years of service would reduce the employment-population ratio by about one percent. In the United States that would mean over a million jobs. Lazear argues that the young could bear a disproportionate amount of the burden. To the contrary, Bertola and Bentolila (1990) found evidence supporting the idea that firing costs have a larger effect on firms' propensity to fire than to hire, and therefore (slightly) increase average long-run employment. On wages Several authors have found that EPL has significant effects on wages. As stated by Lazear (1990), in a perfect labor market, severance payments can have no real effects as they can be undone by a properly designed labor contract. Leonardi and Pica (2006) found evidence supporting this claim. They suggest that in the case of Italy an EPL reform in 1990 had as effect to reduce entry wages by 6 percent, implying that firms tend to transfer the increase in the cost of firing (due to EPL) onto workers. In fact, in their study they find that 25 percent of the firing cost was shifted onto lower wages in the case of Italy. Similarly, Brancaccio, Garbellini, and Giammetti (2018) found that EPL reductions have no significant links with real GDP growth whereas they are significantly correlated with wage share reductions. On firm efficiency and profits In principle the effects on profits are ambiguous. Because of EPL, firms engage themselves in labour hoarding practices, which lead them to employ a lower quantity of workers during upswings, while keeping inefficient levels of employment in downturns. For a given level of wages, this loss of productive efficiency would result in lower average profits. On the other hand, if firms operated in a context of efficiency wages, by inducing more stable relationships with the workers and reducing their job and income insecurity, EPL could allow them to pay lower wages, without reducing the effort provided by the labour force employed, with beneficial effects on profits. On product market regulation There appears to be agreement among economists on the positive correlation between product market and employment regulation. Although employment protection legislation is only one aspect of the wide range of regulatory interventions in the labour market, Nicoletti et al. (2000) find evidence suggesting that, across countries, restrictive regulatory environments in the product market tend to be associated with restrictive employment protection policies. They claim that the