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Do Alternative Work Arrangements Substitute Standard Employment? Evidence from Worker-Level Data

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  • Bernardo Fanfani
  • Filippo Passerini

Abstract

This study analyses the impact of an Alternative Work Arrangement (AWA) called "voucher" on earnings of atypical workers and on their alternative income sources using Italian administrative data. Specifically, we investigate whether this form of very flexible work substitutes income from more standard labor contracts and welfare transfers related to employment insurance (sick and parental leave and unemployment benefits). We estimate cross-income elasticities using fixed effects and diff-in-diff specifications that correct for sample selection of individuals in the labor market. Results show that vouchers increase overall labor income, but they also substitute earnings derived from other labor contracts. We do not find relevant associations between vouchers and welfare transfers. The positive effect of vouchers on total income is smaller in specifications that correct for sample selection bias, and the substitution effect with other labor income sources is substantially larger. Overall, our findings show that AWAs tend to substitute standard employment, with small positive net effects on earnings, which are larger for intensive users of vouchers, and in geographic regions with a more sizable informal sector.

Suggested Citation

  • Bernardo Fanfani & Filippo Passerini, 2024. "Do Alternative Work Arrangements Substitute Standard Employment? Evidence from Worker-Level Data," Working Papers wp1190, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:wp1190
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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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