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Temporary Work Agencies in Italy: A Springboard Toward Permanent Employment?

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  • Andrea Ichino

    ()
    (University of Bologna, CEPR, CESifo and IZA)

  • Fabrizia Mealli

    ()
    (University of Florence)

  • Tommaso Nannicini

    ()
    (European University Institute)

Abstract

This paper measures to what extent Temporary Work Agency (TWA) employment creates a "springboard" toward permanent jobs, or a "trap" of endless precariousness. Applying Propensity Score matching in the presence of choice-based sampling, we estimate the causal effect of the treatment "TWA assignment" on the outcome "finding a permanent job after 18 months". The data come trom Italy, where TWA employment was liberalized in 1997, and they were specifically collected for this evaluation study. We show that a TWA assignment increases the probability of finding a permanent job by 19 percentage points in Tuscany and by 11 percentage points in Sicily, although this second effect is only barely significant. These effects are large given that the observed baseline probabilities in the treated goup are respectively 31% and 23% in the two regions. This treatment effect is highly heterogeneous with respect to observable characteristics such as age, education and firm's sector.

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Bibliographic Info

Article provided by GDE (Giornale degli Economisti e Annali di Economia), Bocconi University in its journal Giornale degli Economisti e Annali di Economia.

Volume (Year): 64 (2005)
Issue (Month): 1 (September)
Pages: 1-27

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Handle: RePEc:gde:journl:gde_v64_n1_p1-27

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Related research

Keywords: temporary employment; Italy; propensity score matching;

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References

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  1. Manski, Charles F & Lerman, Steven R, 1977. "The Estimation of Choice Probabilities from Choice Based Samples," Econometrica, Econometric Society, vol. 45(8), pages 1977-88, November.
  2. 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," IZA Discussion Papers 1241, Institute for the Study of Labor (IZA).
  3. Michael Kvasnicka, 2005. "Does Temporary Agency Work Provide a Stepping Stone to Regular Employment?," SFB 649 Discussion Papers SFB649DP2005-031, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  4. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones or Dead Ends?," LABORatorio R. Revelli Working Papers Series 8, LABORatorio R. Revelli, Centre for Employment Studies.
  5. Lechner, Michael & Pfeiffer, Friedhelm & Spengler, Hannes & Almus, Matthias, 2000. "The impact of non-profit temping agencies on individual labour market success in the West German state of Rhineland-Palatinate," ZEW Discussion Papers 00-02, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  6. Güell, Maia & Petrongolo, Barbara, 2003. "How Binding are Legal Limits? Transitions from Temporary to Permanent Work in Spain," CEPR Discussion Papers 3931, C.E.P.R. Discussion Papers.
  7. Rajeev H. Dehejia & Sadek Wahba, 1998. "Causal Effects in Non-Experimental Studies: Re-Evaluating the Evaluation of Training Programs," NBER Working Papers 6586, National Bureau of Economic Research, Inc.
  8. Miguel A. Malo & Fernando Muñoz-Bullón, . "Temporary help agencies and the labour market biography: A sequences-oriented approach," Studies on the Spanish Economy 132, FEDEA.
  9. Tommaso NANNICINI, 2004. "The Take-off of Temporary Employment in the Italian Labor Market," Economics Working Papers ECO2004/09, European University Institute.
  10. David H. Autor, 2000. "Outsourcing at Will: Unjust Dismissal Doctrine and the Growth of Temporary Help Employment," JCPR Working Papers 153, Northwestern University/University of Chicago Joint Center for Poverty Research.
  11. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
  12. Giuseppe Nicoletti & Andrea Bassanini & Ekkehard Ernst & Sébastien Jean & Paulo Santiago & Paul Swaim, 2001. "Product and Labour Markets Interactions in OECD Countries," OECD Economics Department Working Papers 312, OECD Publishing.
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