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Temporary Employment, Job Flows and Productivity: A Tale of two Reforms

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  • Lorenzo Cappellari
  • Carlo Dell'Aringa
  • Marco Leonardi

Abstract

We investigate the effects of two reforms of temporary employment using panel data on Italian firms. We exploit variation in their implementation across regions and sectors for identification. We find that the reform of apprenticeship contracts increased job turnover and induced the substitution of external staff with firms’ apprentices, with an overall productivity-enhancing effect. The reform of fixed-term contracts instead did not produce the intended results: it induced a substitution of temporary employees in favour of permanent ones and reduced capital intensity, generating productivity losses. We estimate substitution elasticities across types of temporary contracts that are consistent with these interpretations.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3520.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3520

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Keywords: employment contracts; productivity; institutional changes;

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References

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Citations

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Cited by:
  1. Ferrari, Filippo, 2011. "Lo sviluppo delle competenze nei contesti precari
    [Skills development in precariousness: the dark side of flexibility?]
    ," MPRA Paper 33284, University Library of Munich, Germany.
  2. Lorenzo Cappellari & Carlo Dell’Aringa & Marco Leonardi, 2012. "Temporary Employment in Italy," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 10(1), pages 55-62, 04.
  3. Alessia Matano & Paolo Naticchioni, 2012. "What Drives the Urban Wage Premium? Evidence along the Wage Distribution," Working Papers - Dipartimento di Economia 13-DEISFOL, Dipartimento di Economia, Sapienza University of Rome, revised 2012.
  4. Lorenzo Cappellari & Carlo Dell’Aringa & Marco Leonardi, 2012. "Temporary Employment, Job Flows and Productivity: A Tale of Two Reforms," Economic Journal, Royal Economic Society, vol. 122(562), pages F188-F215, 08.
  5. 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).
  6. Centeno, Mário & Novo, Álvaro A., 2012. "Excess worker turnover and fixed-term contracts: Causal evidence in a two-tier system," Labour Economics, Elsevier, vol. 19(3), pages 320-328.
  7. Edoardo Di Porto & Leandro Elia & Cristina Tealdi, 2013. "The "emersion" effect: an ex post and ex ante social program evaluation on labor tax evasion in Italy," Working Papers 2/2013, IMT Institute for Advanced Studies Lucca, revised Jun 2013.
  8. Matteo PICCHIO & Stefano STAFFOLANI, 2013. "Does Apprenticeship Improve Job Opportunities? A Regression Discontinuity Approach," Working Papers 393, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  9. Lisi, Domenico & Malo, Miguel, 2014. "Cross-Sectors Skill Intensity, Productivity and Temporary Employment," MPRA Paper 56470, University Library of Munich, Germany.
  10. Mário Centeno & Álvaro A. Novo, 2012. "Segmentation," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.
  11. Cahuc, Pierre & Charlot, Olivier & Malherbet, Franck, 2012. "Explaining the Spread of Temporary Jobs and its Impact on Labor Turnover," CEPR Discussion Papers 8864, C.E.P.R. Discussion Papers.
  12. Inmaculada Garcia & Colin Green & Maria Navarro Paniagua, 2012. "New Estimates of the Effect of Temporary Employment on Absenteeism," Working Papers 24151321, Lancaster University Management School, Economics Department.
  13. Addessi, William, 2014. "The productivity effect of permanent and temporary labor contracts in the Italian manufacturing sector," Economic Modelling, Elsevier, vol. 36(C), pages 666-672.
  14. Smirnykh, Larisa & Wörgötter, Andreas, 2013. "Why Do Russian Firms Use Fixed-Term and Agency Work Contracts?," IZA Policy Papers 54, Institute for the Study of Labor (IZA).
  15. Murphy, Gavin & Siedschlag, Iulia & McQuinn, John, 2012. "Employment Protection and Innovation Intensity," Papers WP445, Economic and Social Research Institute (ESRI).

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