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

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  • Emanuela Ghignoni

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.

Suggested Citation

  • Emanuela Ghignoni, 2008. "Temporary contracts, employees' effort and labour productivity: the evidence for Italy," Working Papers in Public Economics 111, University of Rome La Sapienza, Department of Economics and Law.
    • Handle: RePEc:sap:wpaper:wp111
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    Cited by:

    1. Tealdi, Cristina, 2011. "Typical and atypical employment contracts: the case of Italy," MPRA Paper 39456, University Library of Munich, Germany.
    2. Emanuela Ghignoni, 2011. "Young workers' overeducation and cohort effects in P.I.G.S. countries versus the Netherlands: a pseudo-panel analysis," Working Papers in Public Economics 147, University of Rome La Sapienza, Department of Economics and Law.
    3. Paulo Aguiar do Monte, 2019. "Effort Level by Firm Size in a Developing Country," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 62(1), pages 73-87, March.
    4. 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.

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    More about this item

    Keywords

    Temporary employment; Effort; Labour productivity; Job satisfaction.;
    All these keywords.

    JEL classification:

    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - 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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