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Labour market transition in Italy: an empirical investigation

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  • Bosio, Giulio

Abstract

In this paper I study the effects of the introduction of Treu package on the hazard rate of moving from a temporary job to a stable work in Italy. In order to enhance the flexibility of labour market and to stress the capabilities to create job, a progressive liberalization of flexible contracts has been adopted in Italy during the ‘90s, widening their scope and easing their adoption. The empirical exercise is carried out using an administrative dataset, Clap, extracted by the social security archives for the years 1992-2002. I apply a parametric and semi-parametric continuous time duration model to investigate whether the recent reform has changed the pattern of duration dependence in temporary employment duration. The main findings emphasize how the Treu package has substantially reduced the positive duration dependence in the hazard rate of moving from temporary to permanent employment. This result is robust to different specifications adopted for the baseline hazard. However, an even stronger conclusion concerns the temporary work agency (TWA) employment which exhibits a negative duration dependence in the post-reform period, probably indicating a negative relation between contract duration and the probability to moving into permanent employment for this contractual type. Finally I find large differences in terms of individual and job-related characteristics.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 18901.

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Date of creation: Sep 2008
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Handle: RePEc:pra:mprapa:18901

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Keywords: temporary employment; proportional hazard model; duration dependence;

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  1. Catalina Amuedo-Dorantes, 2000. "Work transitions into and out of involuntary temporary employment in a segmented market: Evidence from Spain," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 53(2), pages 309-325, January.
  2. Tattara, Giuseppe & Valentini, Marco, 2008. "Labour Market Segmentation, Flexibility and Precariousness in the Italian North East," MPRA Paper 10353, University Library of Munich, Germany.
  3. Sala, Hector & Silva, José I. & Toledo, Manuel E., 2008. "Flexibility at the Margin and Labor Market Volatility in OECD Countries," IZA Discussion Papers 3293, Institute for the Study of Labor (IZA).
  4. Fabio Berton & Francesco Devicienti & Lia Pacelli, 2007. "Temporary jobs: Port of entry, Trap, or just Unobserved Heterogeneity?," LABORatorio R. Revelli Working Papers Series 68, LABORatorio R. Revelli, Centre for Employment Studies.
  5. Andrea Montanino & Paolo Sestito, 2003. "Le molte funzioni del lavoro interinale in Italia: da strumento di flessibilità a contratto di prova," Rivista di Politica Economica, SIPI Spa, SIPI Spa, vol. 93(2), pages 115-148, March-Apr.
  6. Andrea Bassanini & Romain Duval, 2006. "Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions," OECD Social, Employment and Migration Working Papers 35, OECD Publishing.
  7. Andrea Ichino & Fabrizia Mealli & Tommaso Nannicini, 2005. "Temporary Work Agencies in Italy: A Springboard Toward Permanent Employment?," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 64(1), pages 1-27, September.
  8. Matteo PICCHIO, 2007. "The Dynamics of Unemployment, Temporary and Permanent Employment in Italy," Working Papers, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali 286, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  9. Fabio Berton, 2008. "The (long) run out of unemployment: are temporary jobs the shortest way?," LABORatorio R. Revelli Working Papers Series 76, LABORatorio R. Revelli, Centre for Employment Studies.
  10. Lorenzo Corsini & Marco Guerrazzi, 2007. "The Transition from Temporary to Permanent Employment: Evidence from Tuscany," LABOUR, CEIS, CEIS, vol. 21(2), pages 303-332, 06.
  11. O Blanchard & A Landier, 2002. "The Perverse Effects of Partial Labour Market Reform: fixed--Term Contracts in France," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 112(480), pages F214-F244, June.
  12. Tito Boeri & Pietro Garibaldi, 2007. "Two Tier Reforms of Employment Protection: a Honeymoon Effect?," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 117(521), pages 357-385, 06.
  13. D'Addio, Anna Cristina & Rosholm, Michael, 2005. "Exits from temporary jobs in Europe: A competing risks analysis," Labour Economics, Elsevier, Elsevier, vol. 12(4), pages 449-468, August.
  14. Fernando Muñoz-Bullón & J. Ignacio García-Pérez, 2007. "Transitions into Permanent Employment in Spain:An Empirical Analysis for Young Workers," Working Papers 2007-09, FEDEA.
  15. F. Alfonso Arellano, 2005. "Evaluating The Effects Of Labour Market Reforms “At The Margin” On Unemployment And Employment Stability: The Spanish Case," Economics Working Papers we051205, Universidad Carlos III, Departamento de Economía.
  16. Tommaso NANNICINI, 2004. "The Take-off of Temporary Employment in the Italian Labor Market," Economics Working Papers, European University Institute ECO2004/09, European University Institute.
  17. J. Ignacio García‐Pérez & Fernando Muñoz‐Bullón, 2011. "Transitions into Permanent Employment in Spain: An Empirical Analysis for Young Workers," British Journal of Industrial Relations, London School of Economics, vol. 49(1), pages 103-143, March.
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