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Long Term Youth Unemployment or Disposable Workforce?

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  • Bruno Contini
  • Elisa Grand

Abstract

This paper is about very long term unemployment (a more appropriate denomination could be "out-of-official-employment") in Italy, its concentration and the process of young worker disposal, an important, yet unexplored, determinant. “Very long” is not just “long”: we are dealing with 10-20 years of absence from the official labor market of male workers who were young at the beginning of these spells, and are in their thirties, forties or early fifties when we observe them. Young workforce disposal (YWD) reflects the fact that young people are observed at the beginning of their career as dependent employees, their services are "used" for few years (sometimes only few months) as if it were a disposable commodity, after which they disappear from the official labor market. The magnitude of YWD is dramatic: out of 100 new young entries - aged 19-30 at the start of their working career -, between 79 and 86 % are still at regular work (“survive”) after 10 years, and only 78 to 83% by 2009, after 17-22 years, depending on the timing of their initial employment. Many of these people may have joined the irregular economy, but there is no way to estimate their numbers other than by a gross comparison with the estimates of hidden employment provided by ISTAT. These developments imply out-of-official-employment durations four times longer than the unemployment durations provided by official statistics and econometric estimates based on LFS-type microdata. A simple model of the medium run development of the YWD process explains the medium run impact of several demand-side factors: labor cost dynamics, flexibility, age, initial entry conditions.

Suggested Citation

  • Bruno Contini & Elisa Grand, 2012. "Long Term Youth Unemployment or Disposable Workforce?," Carlo Alberto Notebooks 260, Collegio Carlo Alberto.
  • Handle: RePEc:cca:wpaper:260
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    References listed on IDEAS

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    1. Samuel Bentolila & Juan J. Dolado & Pierre Cahuc & Thomas Le Barbanchon, 2010. "Two-Tier Labor Markets in the Great Recession: France Vs. Spain," Working Papers wp2010_1009, CEMFI.
    2. Stewart, Mark B & Swaffield, Joanna K, 1999. "Low Pay Dynamics and Transition Probabilities," Economica, London School of Economics and Political Science, vol. 66(261), pages 23-42, February.
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    4. Giannelli, Gianna Claudia & Jaenichen, Ursula & Villosio, Claudia, 2009. "Have Labour Market Reforms at the Turn of the Millennium Changed Job Durations of the New Entrants? A Comparative Study for Germany and Italy," IZA Discussion Papers 4591, Institute for the Study of Labor (IZA).
    5. Bruno Contini & Ambra Poggi, 2006. "Employability of Young Italian Males after a Jobless Period, 1989-1998," LABORatorio R. Revelli Working Papers Series 48, LABORatorio R. Revelli, Centre for Employment Studies.
    6. Battistin, Erich & Rettore, Enrico, 2008. "Ineligibles and eligible non-participants as a double comparison group in regression-discontinuity designs," Journal of Econometrics, Elsevier, vol. 142(2), pages 715-730, February.
    7. Bruno Contini & Francesca Cornaglia & Claudio Malpede & Enrico Rettore, 2002. "Measuring the Impact of the Italian CFL Programme on the Job Opportunities for the Young," LABORatorio R. Revelli Working Papers Series 11, LABORatorio R. Revelli, Centre for Employment Studies.
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    More about this item

    Keywords

    youth unemployment; mobility; employment flows;

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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