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Are temporary jobs a port of entry into permanent employment?: Evidence from matched employer-employee

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Author Info

  • Fabio Berton
  • Francesco Devicienti
  • Lia Pacelli

Abstract

Purpose – This paper seeks to explore whether temporary jobs are a port of entry into permanent employment and to argue that the answer crucially depends on the type of temporary contracts being considered. Design/methodology/approach – The paper bases its empirical evidence on a longitudinal sample of labour market entrants in Italy and estimates dynamic multinomial logit models with fixed effects to allow for the non-random sorting of workers into the different types of contracts. Findings – The authors show that the transition to permanent employment is more likely for individuals who hold any type of temporary contract than for the unemployed, thus broadly confirming the existence of port-of-entry effects. Yet, not all temporary contracts are the same. An order among non-standard contracts with respect to the probability of taking an open-ended job emerges, with training contracts at the top, freelance work at the bottom, and fixed-term contracts outperforming apprenticeships. Strong SSC rebates, lack of training requirements, and low legal constraints concerning renewals result in poor port-of-entry performance, as in the case of freelance contracts. Instead, mandatory training and more binding legal constraints on the use, extension, and renewals of training contracts tend to enhance the probability of getting a standard job. Originality/value – Most of the existing empirical literature aggregates temporary contracts in a single category, thereby ignoring a relevant source of heterogeneity.

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Bibliographic Info

Article provided by Emerald Group Publishing in its journal International Journal of Manpower.

Volume (Year): 32 (2011)
Issue (Month): 8 (November)
Pages: 879-899

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Handle: RePEc:eme:ijmpps:v:32:y:2011:i:8:p:879-899

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Web page: http://www.emeraldinsight.com

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Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
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Related research

Keywords: Dynamic multinomial logit models; Employment; Fixed effects; Italy; Matched employer-employee data; Port of entry; State dependence; Temporary workers;

References

References listed on IDEAS
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  1. Ichino, Andrea & Mealli, Fabrizia & Nannicini, Tommaso, 2006. "From Temporary Help Jobs to Permanent Employment: What Can We Learn from Matching Estimators and their Sensitivity?," CEPR Discussion Papers 5736, C.E.P.R. Discussion Papers.
  2. Andrea Borgarello & Pietro Garibaldi & Lia Pacelli, 2003. "Employment Protection Legislation and the Size of Firms," LABORatorio R. Revelli Working Papers Series 23, LABORatorio R. Revelli, Centre for Employment Studies.
  3. Bo E. Honoré & Ekaterini Kyriazidou, 2000. "Panel Data Discrete Choice Models with Lagged Dependent Variables," Econometrica, Econometric Society, vol. 68(4), pages 839-874, July.
  4. Juan José Dolado & Carlos García-Serrano & Juan F. Jimeno, . "Drawing Lessons from the Boom of Temporary Jobs in Spain," Working Papers 2001-11, FEDEA.
  5. Fabio Berton & Pietro Garibladi, 2006. "Workers and Firms Sorting into Temporary Jobs," LABORatorio R. Revelli Working Papers Series 51, LABORatorio R. Revelli, Centre for Employment Studies.
  6. Zijl, Marloes & van den Berg, Gerard J & Heyma, Arjan, 2004. "Stepping-stones for the unemployed: The effect of temporary jobs on the duration until regular work," Working Paper Series 2004:19, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  7. Addison, John T. & Surfield, Christopher J., 2006. "Does Atypical Work Help the Jobless? Evidence from a CAEAS/CPS Cohort Analysis," IZA Discussion Papers 2325, Institute for the Study of Labor (IZA).
  8. Güell, Maia & Petrongolo, Barbara, 2003. "How Binding Are Legal Limits? Transitions from Temporary to Permanent Work in Spain," IZA Discussion Papers 782, Institute for the Study of Labor (IZA).
  9. César Alonso-Borrego & Jesús Fernández-Villaverde & José E. Galdón-Sánchez, 2005. "Evaluating Labor Market Reforms: A General Equilibrium Approach," NBER Working Papers 11519, National Bureau of Economic Research, Inc.
  10. Gagliarducci, Stefano, 2005. "The dynamics of repeated temporary jobs," Labour Economics, Elsevier, vol. 12(4), pages 429-448, August.
  11. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2000. "Temporary Jobs: Stepping Stones or Dead Ends?," IZA Discussion Papers 205, Institute for the Study of Labor (IZA).
  12. Hagen, Tobias, 2003. "Do Fixed-Term Contracts Increase the Long-Term Employment Opportunities of the Unemployed?," ZEW Discussion Papers 03-49, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  13. Martin Browning & Jesus M. Carro, 2010. "Heterogeneity in dynamic discrete choice models," Econometrics Journal, Royal Economic Society, vol. 13(1), pages 1-39, 02.
  14. Magnac, Thierry, 2000. "Subsidised Training and Youth Employment: Distinguishing Unobserved Heterogeneity from State Dependence in Labour Market Histories," Economic Journal, Royal Economic Society, vol. 110(466), pages 805-37, October.
  15. Julie Hotchkiss, 1999. "The effect of transitional employment on search duration: A selectivity approach," Atlantic Economic Journal, International Atlantic Economic Society, vol. 27(1), pages 38-52, March.
  16. Bonnal, Liliane & Fougere, Denis & Serandon, Anne, 1997. "Evaluating the Impact of French Employment Policies on Individual Labour Market Histories," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 683-713, October.
  17. Bruno Contini & Francesca Cornaglia & Claudio Malpede & Enrico Rettore, 2002. "Measuring the impact of the Italian CFL programme on the job opportunities for the youths," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B1-4, International Conferences on Panel Data.
  18. D'Addio, Anna Cristina & Rosholm, Michael, 2005. "Exits from temporary jobs in Europe: A competing risks analysis," Labour Economics, Elsevier, vol. 12(4), pages 449-468, August.
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Citations

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Cited by:
  1. Bruno, Giovanni S. F. & Caroleo, Floro Ernesto & Dessy, Orietta, 2013. "Temporary Contracts and Young Workers' Job Satisfaction in Italy," IZA Discussion Papers 7716, Institute for the Study of Labor (IZA).
  2. Lia Pacelli & Silvia Pasqua & Claudia Villosio, 2013. "Labor Market Penalties for Mothers in Italy," Journal of Labor Research, Springer, vol. 34(4), pages 408-432, December.
  3. Tealdi, Cristina, 2011. "Typical and atypical employment contracts: the case of Italy," MPRA Paper 39456, University Library of Munich, Germany.
  4. Francesco Chelli & Chiara Gigliarano, 2012. "An Analysis of the Italian Labour Market based on Compulsory Communications Data," Rivista di statistica ufficiale, ISTAT - Italian National Institute of Statistics - (Rome, ITALY), vol. 14(2-3), pages 5-17.
  5. Picchio, Matteo & Staffolani, Stefano, 2013. "Does Apprenticeship Improve Job Opportunities? A Regression Discontinuity Approach," IZA Discussion Papers 7719, Institute for the Study of Labor (IZA).
  6. Andrea F. Presbitero & Matteo G. Richiardi & Alessia Amighini, 2012. "Is labor flexibility a substitute to offshoring? Evidence from Italian manafacturing," LABORatorio R. Revelli Working Papers Series 122, LABORatorio R. Revelli, Centre for Employment Studies.
  7. Bruno, Giovanni S. F. & Caroleo, Floro Ernesto & Dessy, Orietta, 2012. "Stepping Stones versus Dead End Jobs: Exits from Temporary Contracts in Italy after the 2003 Reform," IZA Discussion Papers 6746, Institute for the Study of Labor (IZA).

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