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The Dynamics of Unemployment, Temporary and Permanent Employment in Italy

In: Non-Standard Employment and Quality of Work. The Case of Italy

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  • Matteo Picchio

    (Tilburg University)

Abstract

This chapter assesses whether temporary jobs have been springboards to regular employment or to dead-end positions in Italy, using for the purpose the 2000, 2002, and 2004 waves of the Survey of Italian Households' Income and Wealth. The estimation of a bivariate dynamic unobserved effects probit model to predict the probability of having a permanent position given the lagged labour market state shows that, ceteris paribus, having a temporary contract today, rather than being unemployed, increases the probability of having a permanent job two years later by about 13.7-16.2 percentage points. This evidence suggests that, given observable and unobservable characteristics, temporary contracts in Italy are stepping-stones to permanent jobs. They enable individuals to leave unemployment by giving them the opportunity to acquire general (and possibly) specific skills so that they are permanent employable afterwards. The estimation of a dynamic discrete mixture and linear probability models assesses the robustness of the stepping-stone effect to the parametric assumptions about the individual heterogeneity. The average partial effects estimated using these two approaches, which were nonparametric in the specification of the unobserved heterogeneity, are in line with those obtained with dynamic nonlinear unobserved effects probit models.

Suggested Citation

  • Matteo Picchio, 2012. "The Dynamics of Unemployment, Temporary and Permanent Employment in Italy," AIEL Series in Labour Economics,in: Tindara Addabbo & Giovanni Solinas (ed.), Non-Standard Employment and Quality of Work. The Case of Italy, edition 1, chapter 7, pages 127-147 AIEL - Associazione Italiana Economisti del Lavoro.
  • Handle: RePEc:ail:chapts:06-07
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    References listed on IDEAS

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    1. Rob Alessie & Stefan Hochguertel & Arthur van Soest, 2004. "Ownership of Stocks and Mutual Funds: A Panel Data Analysis," The Review of Economics and Statistics, MIT Press, vol. 86(3), pages 783-796, August.
    2. Matteo, PICCHIO, 2006. "Wage Differentials and Temporary Jobs in Italy," Discussion Papers (ECON - Département des Sciences Economiques) 2006033, Université catholique de Louvain, Département des Sciences Economiques.
    3. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones Or Dead Ends?," Economic Journal, Royal Economic Society, vol. 112(480), pages 189-213, June.
    4. Andrea Ichino & Fabrizia Mealli & Tommaso Nannicini, 2005. "Temporary Work Agencies in Italy: A Springboard Toward Permanent Employment?," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 64(1), pages 1-27, September.
    5. Juan F. Jimeno & Luis Toharia, 1993. "The effects of fixed-term employment on wages: theory and evidence from Spain," Investigaciones Economicas, Fundación SEPI, vol. 17(3), pages 475-494, September.
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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. Fabio FIORILLO & Agnese SACCHI, 2010. "I Want to Free-ride. An Opportunistic View on Decentralization Versus Centralization Problem," Working Papers 346, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    3. De Vita, Glauco & Livanos, Ilias & Salotti, Simone, 2014. "Involuntary non-standard employment: evidence from Italian regions," MPRA Paper 58117, University Library of Munich, Germany.
    4. Elena AMBROSETTI & Eralba CELA & Tineke FOKKEMA, 2011. "The Remittances Behaviour of the Second Generation in Europe: Altruism or Self-Interest?," Working Papers 368, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    5. Ugo FRATESI, 2010. "The National and International Effects;of Regional Policy Choices: Agglomeration Economies, Peripherality and Territorial Characteristics," Working Papers 344, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    6. Luca RICCETTI, 2010. "Minimum Tracking Error Volatility," Working Papers 340, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    7. Luca RICCETTI, 2011. "A Copula-GARCH Model for Macro Asset Allocation of a Portfolio with Commodities: an Out-of-Sample Analysis," Working Papers 355, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    8. Bosio, Giulio, 2008. "Labour market transition in Italy: an empirical investigation," MPRA Paper 18901, University Library of Munich, Germany.

    More about this item

    Keywords

    temporary work; labour market transitions; permanent employment.;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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