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The Impact of Part-Time Work on Firm Total Factor Productivity: Evidence from Italy

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  • Francesco Devicienti
  • Elena Grinza
  • Davide Vannoni

Abstract

In this paper, we explore the impact of part-time work on firm productivity. Using a large panel data set of Italian corporations' balance sheets for the period 2000- 2010, we first estimate the total factor productivity (TFP) of each firm for each year. We use different approaches aimed at solving input simultaneity, including a version of Ackerberg et al. [2006]'s control function approach, which accounts for firm fixed effects. We then match the TFP estimates with rich information on the firms' use of part-time work obtained from survey data and estimate the impact of part-time work on TFP at the firm level. We find that an increase of 1 standard deviation in the part- time share reduces TFP by 2.03%. The results suggest that this harmful effect stems from horizontal rather than vertical part-time arrangements. We also find that firms declaring that they use part-time work to accommodate workers' requests suffer the most. Moreover, we show that the so-called 'flexible' and 'elastic' clauses are successful in reducing the negative impact associated with part-time work.

Suggested Citation

  • Francesco Devicienti & Elena Grinza & Davide Vannoni, 2015. "The Impact of Part-Time Work on Firm Total Factor Productivity: Evidence from Italy," Carlo Alberto Notebooks 433, Collegio Carlo Alberto.
  • Handle: RePEc:cca:wpaper:433
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Rycx, Francois & Saks, Yves & Tojerow, Ilan, 2016. "Misalignment of Productivity and Wages across Regions? Evidence from Belgian Matched Panel Data," IZA Discussion Papers 10336, Institute of Labor Economics (IZA).
    2. Collewet, Marion & Sauermann, Jan, 2017. "Working Hours and Productivity," Working Paper Series 3/2017, Stockholm University, Swedish Institute for Social Research.
    3. Kampelmann, Stephan & Mahy, Benoît & Rycx, Francois & Vermeylen, Guillaume, 2016. "Who Is Your Perfect Match? Educational Norms, Educational Mismatch and Firm Profitability," IZA Discussion Papers 10399, Institute of Labor Economics (IZA).
    4. Andrea Garnero, 2016. "Are part-time workers less productive and underpaid?," IZA World of Labor, Institute of Labor Economics (IZA), pages 249-249, April.
    5. Serena Trucchi & Elsa Fornero & Mariacristina Rossi, 2018. "Retirement rigidities and the gap between effective and desired labour supply by older workers," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-19, December.
    6. Benoît Mahy & François Rycx & Guillaume Vermeylen & Mélanie Volral, 2018. "Productivity, wages and profits: Does firms’ position in the value chain matter?," Working Paper Research 358, National Bank of Belgium.
    7. Grinza, Elena & Rycx, Francois, 2018. "The Impact of Sickness Absenteeism on Productivity: New Evidence from Belgian Matched Panel Data," IZA Discussion Papers 11543, Institute of Labor Economics (IZA).
    8. R. Giuliano & B. Mahy & F. Rycx & G. Vermeylen, 2017. "Does corporate social responsibility make over-educated workers more productive?," Applied Economics, Taylor & Francis Journals, vol. 49(6), pages 587-605, February.
    9. Grinza, Elena & Kampelmann, Stephan & Rycx, Francois, 2018. "L'union fait la force? Evidence for Wage Discrimination in Firms with High Diversity," IZA Discussion Papers 11520, Institute of Labor Economics (IZA).
    10. repec:spr:izalbr:v:7:y:2018:i:1:d:10.1186_s40172-017-0061-4 is not listed on IDEAS
    11. repec:eee:labeco:v:47:y:2017:i:c:p:96-106 is not listed on IDEAS
    12. Collewet, Marion & Sauermann, Jan, 2017. "Working hours and productivity," Labour Economics, Elsevier, vol. 47(C), pages 96-106.
    13. Devicienti, Francesco & Grinza, Elena & Manello, Alessandro & Vannoni, Davide, 2016. "Which Are the Benefits of Having More Female Leaders? Evidence from the Use of Part-Time Work in Italy," IZA Discussion Papers 10314, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Part-time work; Horizontal and vertical part-time contracts; Flexible and elastic clauses; Firm total factor productivity (TFP); Semiparametric estimation methods;

    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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