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Fixed Term Contracts, Social Security Rebates and Labour Demand in Italy

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Author Info
Lia Pacelli

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Abstract

The availability of a flexible labour force might influence adjustment decisions regarding the rigid part of the labour force. To test this idea, we contrast the use of trainees (fixed-term contracts) and normal-contract workers (open-end contracts) when a reform made it more costly to use trainees. The results of our DID analysis indicate that the burden of adjustment shifts on trainees if they are present in the firm; if this buffer becomes less available, firms employing trainees see their average labour productivity decrease in the short run and their job destruction increase in the medium run. These effects seem to be increasing with firm size.

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Publisher Info
Paper provided by LABORatorio R. Revelli, Centre for Employment Studies in its series LABORatorio R. Revelli Working Papers Series with number 7.

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Length: 51 pages
Date of creation: 2002
Date of revision:
Handle: RePEc:cca:wplabo:7

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Related research
Keywords: fixed term contracts; difference in differences analysis; labour demand; job creation; firing costs.;

Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Goux, Dominique & Maurin, Eric & Pauchet, Marianne, 2001. "Fixed-term contracts and the dynamics of labour demand," European Economic Review, Elsevier, vol. 45(3), pages 533-552, March. [Downloadable!] (restricted)
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  2. Alessandra Del Boca & Paola Rota, 1998. "How Much Does Hiring and Firing Cost? Survey Evidence from a Sample of Italian Firms," LABOUR, CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd, vol. 12(3), pages 427-449, 09. [Downloadable!] (restricted)
  3. Bentolila, Samuel & Bertola, Giuseppe, 1990. "Firing Costs and Labour Demand: How Bad Is Eurosclerosis?," Review of Economic Studies, Blackwell Publishing, vol. 57(3), pages 381-402, July. [Downloadable!] (restricted)
  4. Victor Aguirregabiria & Cesar Alonso-Borrego, 2009. "Labor Contracts and Flexibility: Evidence from a Labor Market Reform in Spain," Working Papers tecipa-346, University of Toronto, Department of Economics. [Downloadable!]
    Other versions:
  5. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. 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). [Downloadable!]
    Other versions:
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This page was last updated on 2009-12-3.

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