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Temporary contracts, employees’ effort and labour productivity: the evidence for Italy

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Author Info
Emanuela Ghignoni

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Abstract

This paper discusses the thesis (recently pointed out by empirical evidence on Swiss data) that, if temporary contracts are utilised by firms as a tool to screen potential new employees and provide workers with a “stepping stone” into permanent employment, then temporary employees have an incentive to provide more effort than their permanent colleagues. After a theoretical discussion, the paper focuses on the econometrical analysis of this thesis in an institutional context, like the Italian one, in which permanent workers are rather protected and firms are likely to use temporary contracts mainly to adjust the workforce during the cycle. Data are drawn from ECHP (1996-2001) for Italy and from ISFOL-Plus 2005. The paper concludes by pointing out that a higher effort does not necessary mean higher labour productivity, and suggests the necessary public policies to improve productivity in labour markets characterised by a growing rate of temporary jobs.

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File URL: http://dep.eco.uniroma1.it/docs/working_papers/Wp111.pdf
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Publisher Info
Paper provided by Sapienza University of Rome, Department of Public Economics in its series Working Papers with number 111.

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Length: 28 pages
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:sap:wpaper:111

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Related research
Keywords: Temporary employment; Effort; Labour productivity; Job satisfaction.;

Find related papers by JEL classification:
M51 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Firm Employment Decisions; Promotions
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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  1. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones Or Dead Ends?," Economic Journal, Royal Economic Society, vol. 112(480), pages F189-F213, June. [Downloadable!] (restricted)
    Other versions:
  2. Saint-Paul, Gilles, 2004. "Why are European Countries Diverging in their Unemployment Experience?," IDEI Working Papers 269, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
    Other versions:
  3. Guadalupe, Maria, 2003. "The hidden costs of fixed term contracts: the impact on work accidents," Labour Economics, Elsevier, vol. 10(3), pages 339-357, June. [Downloadable!] (restricted)
    Other versions:
  4. Güell, Maia & Petrongolo, Barbara, 2003. "How Binding Are Legal Limits? Transitions from Temporary to Permanent Work in Spain," IZA Discussion Papers 782, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  5. Dornbusch, Rudiger & Fischer, Stanley & Samuelson, Paul A, 1977. "Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods," American Economic Review, American Economic Association, vol. 67(5), pages 823-39, December. [Downloadable!] (restricted)
    Other versions:
  6. Barmby, Tim, 2002. "Worker absenteeism: a discrete hazard model with bivariate heterogeneity," Labour Economics, Elsevier, vol. 9(4), pages 469-476, September. [Downloadable!] (restricted)
  7. William D. Ferguson, 2004. "Worker Motivation, Wages, and Bilateral Market Power in Nonunion Labor Markets," Eastern Economic Journal, Eastern Economic Association, vol. 30(4), pages 527-547, Fall. [Downloadable!]
  8. Steve Bradley & Colin Green & Gareth Leeves, 2007. "Employment contracts and effort: why do temporary workers take less absence?," Working Papers 005102, Lancaster University Management School, Economics Department. [Downloadable!]
  9. Barmby, T A & Orme, C D & Treble, John G, 1991. "Worker Absenteeism: An Analysis Using Microdata," Economic Journal, Royal Economic Society, vol. 101(405), pages 214-29, March. [Downloadable!] (restricted)
    Other versions:
  10. Johansson, Per & Palme, Marten, 1996. "Do economic incentives affect work absence? Empirical evidence using Swedish micro data," Journal of Public Economics, Elsevier, vol. 59(2), pages 195-218, February. [Downloadable!] (restricted)
  11. Cecilia Albert & Carlos García-Serrano & Virginia Hernanz, 2004. "Firm-provided training and temporary contracts," Spanish Economic Review, Springer, vol. 7(1), pages 67-88, January. [Downloadable!] (restricted)
  12. Farber, Henry S, 1999. "Alternative and Part-Time Employment Arrangements as a Response to Job Loss," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages S142-69, October. [Downloadable!] (restricted)
  13. Weiss, Andrew W, 1980. "Job Queues and Layoffs in Labor Markets with Flexible Wages," Journal of Political Economy, University of Chicago Press, vol. 88(3), pages 526-38, June. [Downloadable!] (restricted)
  14. Engellandt, Axel & Riphahn, Regina T., 2005. "Temporary contracts and employee effort," Labour Economics, Elsevier, vol. 12(3), pages 281-299, June. [Downloadable!] (restricted)
    Other versions:
  15. Henry S. Farber, 1999. "Alternative and Part-Time Employment Arrangements as a Response to Job Loss," NBER Working Papers 7002, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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