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Temporary Employment, Job Flows and Productivity: A Tale of two Reforms

  • Lorenzo Cappellari
  • Carlo Dell'Aringa
  • Marco Leonardi

We investigate the effects of two reforms of temporary employment using panel data on Italian firms. We exploit variation in their implementation across regions and sectors for identification. We find that the reform of apprenticeship contracts increased job turnover and induced the substitution of external staff with firms’ apprentices, with an overall productivity-enhancing effect. The reform of fixed-term contracts instead did not produce the intended results: it induced a substitution of temporary employees in favour of permanent ones and reduced capital intensity, generating productivity losses. We estimate substitution elasticities across types of temporary contracts that are consistent with these interpretations.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3520.

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Date of creation: 2011
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Handle: RePEc:ces:ceswps:_3520
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  12. Cappellari, Lorenzo & Dell’Aringa, Carlo & Leonardi, Marco, 2012. "Temporary Employment, Job Flows and Productivity: A Tale of Two Reforms," IZA Discussion Papers 6526, Institute for the Study of Labor (IZA).
  13. Carmen Pagés-Serra & Alejandro Micco, 2008. "The Economic Effects of Employment Protection: Evidence from International Industry-Level Data," Research Department Publications 4496, Inter-American Development Bank, Research Department.
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  33. repec:oup:restud:v:57:y:1990:i:3:p:381-402 is not listed on IDEAS
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