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The impact of temporary employment on productivity
[Auswirkungen befristeter Beschäftigung auf die Produktivität]

Author

Listed:
  • Domenico Lisi

    (University of Catania)

  • Miguel A. Malo

    (Universidad de Salamanca)

Abstract

Recent papers in the economic literature emphasise that the use of temporary contracts (TE) could have a detrimental effect on productivity. However, there are different reasons to believe that the impact of TE might not be homogeneous across sectors. In this article, we study the impact of TE on productivity growth and, in particular, we wonder if it differs according to sectors’ skill intensity. Our data set is an industry-level panel of European countries that allows to divide sectors according to the skill intensity. Our main result is that TE has a negative impact on productivity growth, but it is more damaging in skilled sectors. While an increase of 10 percentage points of the share of TE in skilled sectors would decrease labour productivity growth of about 1–1.5%, in unskilled sectors the decrease would be of 0.5–0.8%. This result is robust to different skill intensity indexes and productivity measures, as well as to the sample composition. We also discuss policy implications of this result for labour market regulation.

Suggested Citation

  • Domenico Lisi & Miguel A. Malo, 2017. "The impact of temporary employment on productivity [Auswirkungen befristeter Beschäftigung auf die Produktivität]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 50(1), pages 91-112, August.
  • Handle: RePEc:spr:jlabrs:v:50:y:2017:i:1:d:10.1007_s12651-017-0222-8
    DOI: 10.1007/s12651-017-0222-8
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    More about this item

    Keywords

    Productivity; Temporary employment; Skill intensity; Differential effect;
    All these keywords.

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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