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Wage Differentials between Temporary and Permanent Workers in Italy

  • Matteo PICCHIO

    ()

    (Universita' Politecnica delle Marche, Dipartimento di Economia)

The focus of this paper is to estimate the wage differentials between temporary and permanent workers using the 2002 wave of the Survey of Italian Households' Income and Wealth (SHIW) carried out by the Bank of Italy. A standard Mincer equation extended to a dummy variable for fied term contracts, interaction terms, and further explanatory variables will be estimated. Two hypothetical sources of misspecification may arise. Firstly, the potential endogeneity of the dummy variable for the contract type. Indeed, it seems plausible that those who end up in temporary jobs are not a random draw from the population and that this selection generates biased estimates. We will propose two methods to overcome the self-selectivity bias: the first one is an instrumental variables approach, the second one consists in the Heckman's (1978) dummy endogenous variable model estimator. The second possible source of misspecification is the "classical" Heckman's (1979) sample selection bias. We will present a procedure in order to test the presence of such a sample selection bias taking into account the endogeneity of the dummy variable for the contract type.

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File URL: http://docs.dises.univpm.it/web/quaderni/pdf/257.pdf
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Paper provided by Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali in its series Working Papers with number 257.

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Length: 35
Date of creation: Apr 2006
Date of revision:
Handle: RePEc:anc:wpaper:257
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  1. Alison L Booth & Juan J. Dolado & Jeff Frank, 2002. "Symposium On Temporary Work Introduction," Economic Journal, Royal Economic Society, vol. 112(480), pages F181-F188, June.
  2. Riccardo Lucchetti & Stefano Staffolani & Alessandro Sterlacchini, 2004. "Computers, Wages and Working Hours in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 63(3-4), pages 329-353, December.
  3. María A.Davia & Virginia Hernanz, 2004. "Temporary employment and segmentation in the Spanish labour market: An empirical analysis through the study of wage differentials," Spanish Economic Review, Springer, vol. 6(4), pages 291-318, December.
  4. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, October.
  5. María Guadalupe, 2002. "The Hidden Costs of Fixed Term Contracts: the Impact On Work Accidents," CEP Discussion Papers dp0551, Centre for Economic Performance, LSE.
  6. repec:ese:iserwp:2002-29 is not listed on IDEAS
  7. Gourieroux,Christian, 2000. "Econometrics of Qualitative Dependent Variables," Cambridge Books, Cambridge University Press, number 9780521589857.
  8. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones Or Dead Ends?," Economic Journal, Royal Economic Society, vol. 112(480), pages F189-F213, June.
  9. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters, in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  10. Gourieroux,Christian, 2000. "Econometrics of Qualitative Dependent Variables," Cambridge Books, Cambridge University Press, number 9780521331494.
  11. Booth, Alison L. & Francesconi, Marco & Frank, Jeff, 2002. "Labour as a Buffer: Do Temporary Workers Suffer?," IZA Discussion Papers 673, Institute for the Study of Labor (IZA).
  12. 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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