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Fixed Term Contracts, Social Security Rebates and Labour Demand in Italy

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  • Lia Pacelli

Abstract

The availability of a flexible labour force might influence adjustment decisions regarding the rigid part of the labour force. To test this idea, we contrast the use of trainees (fixed-term contracts) and normal-contract workers (open-end contracts) when a reform made it more costly to use trainees. The results of our DID analysis indicate that the burden of adjustment shifts on trainees if they are present in the firm; if this buffer becomes less available, firms employing trainees see their average labour productivity decrease in the short run and their job destruction increase in the medium run. These effects seem to be increasing with firm size.

Suggested Citation

  • Lia Pacelli, 2002. "Fixed Term Contracts, Social Security Rebates and Labour Demand in Italy," LABORatorio R. Revelli Working Papers Series 7, LABORatorio R. Revelli, Centre for Employment Studies.
    • Handle: RePEc:cca:wplabo:7
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    File URL: http://www.laboratoriorevelli.it/_pdf/wp7.pdf
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    References listed on IDEAS

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    1. Richard Blundell & Alan Duncan & Costas Meghir, 1998. "Estimating Labor Supply Responses Using Tax Reforms," Econometrica, Econometric Society, vol. 66(4), pages 827-862, July.
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    3. Goux, Dominique & Maurin, Eric & Pauchet, Marianne, 2001. "Fixed-term contracts and the dynamics of labour demand," European Economic Review, Elsevier, vol. 45(3), pages 533-552, March.
    4. Victor Aguirregabiria & Cesar Alonso-Borrego, 2014. "Labor Contracts And Flexibility: Evidence From A Labor Market Reform In Spain," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 930-957, April.
    5. Abowd, John M. & Kramarz, Francis, 2003. "The costs of hiring and separations," Labour Economics, Elsevier, vol. 10(5), pages 499-530, October.
    6. Richard Blundell & Monica Costa Dias, 2000. "Evaluation methods for non-experimental data," Fiscal Studies, Institute for Fiscal Studies, vol. 21(4), pages 427-468, January.
    7. Lia Pacelli & Fabio Rapiti & Rlccardo Revelli, 1998. "Employment And Mobility Of Workers In Industries With Different Intensity Of Innovation: Evidence On Italy From A Panel Of Workers And Firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 5(2-4), pages 273-300.
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    Citations

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    Cited by:

    1. Marloes de Graaf-Zijl & Gerard van den Berg & Arjan Heyma, 2011. "Stepping stones for the unemployed: the effect of temporary jobs on the duration until (regular) work," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(1), pages 107-139, January.
    2. Li, Bingqin & Peng, Huamin, 2006. "The social protection of rural workers in the construction industry in urban China," LSE Research Online Documents on Economics 6226, London School of Economics and Political Science, LSE Library.
    3. Francesca Marino, 2013. "The Italian productivity slowdown in a Real Business Cycle perspective," SERIES 0046, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Apr 2013.
    4. Francesca Marino, 2016. "The Italian productivity slowdown in a Real Business Cycle perspective," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 63(2), pages 171-193, June.
    5. Bingqin Li & Huamin Peng, 2006. "The Social Protection of Rural Workers in the Construction Industry in Urban China," CASE Papers case113, Centre for Analysis of Social Exclusion, LSE.

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    More about this item

    Keywords

    fixed term contracts; difference in differences analysis; labour demand; job creation; firing costs.;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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