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Earnings Instability and Tenure

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  • Lorenzo Cappellari

    ()
    (DISCE, Università Cattolica)

  • Marco Leonardi

    ()
    (Dipartimento di Studi del Lavoro, Università di Milano)

Abstract

This paper develops a tractable empirical approach to estimate the effect of on-the-job tenure on the permanent and transitory variance of earnings. The model is also used to evaluate the earnings instability associated with fixed-term contract (short-tenure contracts) in Italy. Our results indicate that each year of tenure on the job reduces earnings instability on average by 15%. Workers on a fixed-term contract on average have an earnings instability 10% higher than workers on a permanent contract. Workers who spend their entire working life on fixed-term contracts can expect an earnings instability twice as high.

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File URL: http://www.unicatt.it/Istituti/EconomiaImpresaLavoro/Quaderni/ieil0048.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) in its series DISCE - Quaderni dell'Istituto di Economia dell'Impresa e del Lavoro with number ieil0048.

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Length: 31
Date of creation: Mar 2007
Date of revision:
Handle: RePEc:ctc:serie4:ieil0048

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Web page: http://www.unicatt.it/Istituti/EconomiaImpresaLavoro
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Keywords: earnings instability; earnings dynamics; tenure; temporary contracts; minimum distance estimation.;

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References

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Citations

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Cited by:
  1. SOLOGON Denisa & VAN KERM Philippe, 2014. "Earnings dynamics, foreign workers and the stability of inequality trends in Luxembourg 1988-2009," CEPS/INSTEAD Working Paper Series 2014-03, CEPS/INSTEAD.
  2. C. Giannetti & M. Madia & L. Moretti, 2013. "Job Insecurity and Financial Distress," Working Papers wp887, Dipartimento Scienze Economiche, Universita' di Bologna.
  3. María Cervini-Plá & Xavier Ramos, 2012. "Long-Term Earnings Inequality, Earnings Instability and Temporary Employment in Spain: 1993–2000," British Journal of Industrial Relations, London School of Economics, vol. 50(4), pages 714-736, December.

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