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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

  • Matteo Picchio

    (Tilburg University)

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.

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This chapter was published in:
  • Tindara Addabbo & Giovanni Solinas (ed.), 2012. "Non-Standard Employment and Quality of Work. The Case of Italy," AIEL Series in Labour Economics, AIEL - Associazione Italiana Economisti del Lavoro, number 06, December.
  • This item is provided by AIEL - Associazione Italiana Economisti del Lavoro in its series AIEL Series in Labour Economics with number 06-07.
    Handle: RePEc:ail:chapts:06-07
    Contact details of provider: Postal: Dipartimento di Giurisprudenza, Seconda Universitá di Napoli, Via Mazzocchi 5, 81055 S. Maria Capua Vetere (CE)
    Phone: +39 0823 275530
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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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    1. 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.
    2. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones or Dead Ends?," LABORatorio R. Revelli Working Papers Series 8, LABORatorio R. Revelli, Centre for Employment Studies.
    3. Alessie, Rob & Stefan Hochguertel & Arthur van Soest, 2002. "Ownership of Stocks and Mutual Funds: A Panel Data Analysis," Royal Economic Society Annual Conference 2002 3, Royal Economic Society.
    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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