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The productivity effect of permanent and temporary labor contracts in the Italian manufacturing sector

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  • Addessi, William

Abstract

This paper studies the effect of permanent and temporary labor contracts on both labor-augmenting and TFP-augmenting technological factors using a panel dataset of Italian manufacturing firms. The empirical analysis applies a structural approach in which firm TFP follows a controlled Markov process that is affected by the relative use of labor contracts, and labor services are perfect substitutes but with different labor-augmenting factors. The empirical results show that when including labor-contract composition in the TFP process: i) the difference between permanent and temporary contracts in the labor-augmenting productivity factor is not significant and ii) the incidence of permanent contracts in total contracts has a positive effect on TFP dynamics.

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  • 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.
    • Handle: RePEc:eee:ecmode:v:36:y:2014:i:c:p:666-672
    DOI: 10.1016/j.econmod.2013.09.054
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    7. Alexander Schiersch, 2015. "TFP, Labor Productivity and the (Un)observed Labor Input: Temporary Agency Work," Discussion Papers of DIW Berlin 1532, DIW Berlin, German Institute for Economic Research.
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    9. Calcagnini, Giorgio & Marin, Giovanni & Perugini, Francesco, 2021. "Labour flexibility, internal migration and productivity in Italian regions," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 308-320.
    10. Alessia Matano, 2022. "Spatial externalities in big cities and duality of the labour market," Journal of Regional Science, Wiley Blackwell, vol. 62(2), pages 471-498, March.
    11. Schiersch, Alexander, 2016. "Considering the (Un)observed: temporary agency work in productivity estimations," VfS Annual Conference 2016 (Augsburg): Demographic Change 145749, Verein für Socialpolitik / German Economic Association.
    12. Carreño Bustos, José Gabo, 2023. "Flexible Contracts as Business Cycle Stabilizers," Discussion Paper 2023-007, Tilburg University, Center for Economic Research.
    13. Bianca Biagi & Maria Gabriela Ladu, 2018. "Productivity and employment dynamics: new evidence from Italian regions," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(2), pages 313-336, August.
    14. Berton, Fabio & Migheli Matteo, 2015. "Estimating the marginal rate of substitution between wage and employment protection," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201529, University of Turin.
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    More about this item

    Keywords

    Total factor productivity; Labor productivity; Permanent and temporary labor contracts;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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