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Temporary Employment, Demand Volatility, and Unions: Firm-Level Evidence

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  • Francesco Devicienti
  • Paolo Naticchioni
  • Andrea Ricci

Abstract

This article investigates the effect of workplace unionization and product market volatility on firms’ propensity to use temporary employment. Using Italian firm-level data, the authors show that volatility has a positive impact on the share of temporary contracts. The baseline estimates for the impact of unions are inconclusive, but a clear pattern emerges when a specification including an interaction term with volatility is used. This approach allows a richer characterization of the impact of workplace unionization, which is positive for low levels of volatility and negative for high levels. The authors discuss various direct and indirect mechanisms to explain this novel finding. Furthermore, they find that these effects hold only for cases in which the employer does not provide training for temporary workers, whereas temporary contracts with training provisions are not affected by unions, volatility, and their interplay.

Suggested Citation

  • Francesco Devicienti & Paolo Naticchioni & Andrea Ricci, 2018. "Temporary Employment, Demand Volatility, and Unions: Firm-Level Evidence," ILR Review, Cornell University, ILR School, vol. 71(1), pages 174-207, January.
  • Handle: RePEc:sae:ilrrev:v:71:y:2018:i:1:p:174-207
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Cardullo, Gabriele & Conti, Maurizio & Sulis, Giovanni, 2018. "Unions, Two-Tier Bargaining and Physical Capital Investment: Theory and Firm-Level Evidence from Italy," IZA Discussion Papers 12008, Institute of Labor Economics (IZA).
    2. Belloc, Marianna & Naticchioni, Paolo & Vittori, Claudia, 2019. "Urban Wage Premia, Cost of Living, and Collective Bargaining," IZA Discussion Papers 12806, Institute of Labor Economics (IZA).
    3. Bratti, Massimiliano & Conti, Maurizio & Sulis, Giovanni, 2019. "Employment Protection and Firm-provided Training: Quasi-experimental Evidence from a Labour Market Reform," GLO Discussion Paper Series 368, Global Labor Organization (GLO).
    4. Giorgio d'Agostino & Michele Raitano & Margherita Scarlato, 2019. "Job mobility and heterogeneous returns to apprenticeship training in Italy," Working Papers 0043, ASTRIL - Associazione Studi e Ricerche Interdisciplinari sul Lavoro.
    5. Fabrizio Pompei & Mirella Damiani & Andrea Ricci, 2019. "Family firms, performance-related pay, and the great crisis: evidence from the Italian case," Industrial and Corporate Change, Oxford University Press, vol. 28(5), pages 1193-1225.
    6. Addison, John T. & Teixeira, Paulino & Grunau, Philipp & Bellmann, Lutz, 2018. "Worker Representation and Temporary Employment in Germany: The Deployment and Extent of Fixed-Term Contracts and Temporary Agency Work," IZA Discussion Papers 11378, Institute of Labor Economics (IZA).
    7. Alessandro Arrighetti & Eleonora Bartoloni & Fabio Landini & Chiara Pollio, 2019. "Exuberant Proclivity Towards Non-Standard Employment:Evidence from Linked Employer-Employee Data," Working Papers 1905, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2019.
    8. Bratti, Massimiliano & Conti, Maurizio & Sulis, Giovanni, 2018. "Employment Protection, Temporary Contracts and Firm-Provided Training: Evidence from Italy," IZA Discussion Papers 11339, Institute of Labor Economics (IZA).
    9. Andrea Bassanini & Eve Caroli & François Fontaine & Antoine Rebérioux, 2019. "Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms," PSE Working Papers halshs-01724188, HAL.
    10. Joonmo Cho & Jinha Kim, 2018. "Identifying Factors Reinforcing Robotization: Interactive Forces of Employment, Working Hour and Wage," Sustainability, MDPI, Open Access Journal, vol. 10(2), pages 1-21, February.
    11. Burdin, Gabriel & Pérotin, Virginie, 2019. "Employee representation and flexible working time," Labour Economics, Elsevier, vol. 61(C).
    12. Damiani, Mirella & Pompei, Fabrizio & Ricci, Andrea, 2019. "Opting Out, Collective Contracts and Labour Flexibility: Firm-Level Evidence for The Italian Case," MPRA Paper 97426, University Library of Munich, Germany.
    13. Patrizia Ordine & Giuseppe Rose & Gessica Vella, 2017. "The Effect of Temporary Agency Workers on Wage of Permanent Employees: Evidence From Linked Employer-Employee Data," LABOUR, CEIS, vol. 31(4), pages 415-432, December.
    14. Marianna Belloc & Paolo Naticchioni & Claudia Vittori, 2018. "Urban Wage Premia, Cost of Living, and Collective Bargaining," CESifo Working Paper Series 7253, CESifo.

    More about this item

    Keywords

    unions; temporary workers; training; product demand volatility; firms;

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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