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Flexible Employment, Job Flows and Labour Productivity

Author

Listed:
  • Lorenzo Cappellari

    (DISCE, Università Cattolica)

  • Carlo Dell'Aringa

    (DISCE, Università Cattolica)

  • Marco Leonardi

    (Dipartimento di Scienze Economiche, Aziendali e Statistiche Università degli Studi di Milano)

Abstract

In this paper we provide evidence on the effects of temporary employment on job flows, labour productivity and investment. As a source of identification, we exploit reforms in the legislation of fixed-term and apprenticeships contracts whose implementation varied over regions and industries. Results indicate that the reform of apprenticeship contracts has increased the turnover of workers and has induced capital-labor substitution in favour of labour, with an overall productivity-enhancing effect. The reform of fixed-term contracts instead does not seem to have had the intended results and may have made the use of these contracts more costly rather than less costly. Ineffectiveness of the reform may also depend on firms substituting across different types of labour: we estimate elasticities of substitution that are consistent with this interpretation.

Suggested Citation

  • Lorenzo Cappellari & Carlo Dell'Aringa & Marco Leonardi, 2010. "Flexible Employment, Job Flows and Labour Productivity," DISCE - Quaderni dell'Istituto di Economia dell'Impresa e del Lavoro ieil0060, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    • Handle: RePEc:ctc:serie4:ieil0060
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    File URL: http://www.unicatt.it/Istituti/EconomiaImpresaLavoro/Quaderni/ieil0060.pdf
    File Function: First version, 2010
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    References listed on IDEAS

    as
    1. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June.
    2. Guell, Maia & Petrongolo, Barbara, 2007. "How binding are legal limits? Transitions from temporary to permanent work in Spain," Labour Economics, Elsevier, vol. 14(2), pages 153-183, April.
    3. David H. Autor & William R. Kerr & Adriana D. Kugler, 2007. "Do Employment Protections Reduce Productivity? Evidence from U.S. States," NBER Working Papers 12860, National Bureau of Economic Research, Inc.
    4. Pagés, Carmen & Micco, Alejandro, 2004. "Employment Protection and Gross Job Flows: A Differences-in-Differences Approach," IDB Publications (Working Papers) 1106, Inter-American Development Bank.
    5. Federico Cingano & Marco Leonardi & Julián Messina & Giovanni Pica, 2010. "The effects of employment protection legislation and financial market imperfections on investment: evidence from a firm-level panel of EU countries [Technology and labour regulations]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 25(61), pages 117-163.
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    Citations

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    Cited by:

    1. Fredrik Heyman & Per Skedinger, 2016. "Employment Protection Reform, Enforcement in Collective Agreements and Worker Flows," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(4), pages 662-704, October.
    2. Bosio, Giulio & Leonardi, Marco, 2011. "The Impact of Bologna Process on the Graduate Labour Market: Demand and Supply," IZA Discussion Papers 5789, IZA Network @ LISER.
    3. Sebastian NIELEN & Alexander SCHIERSCH, 2016. "Productivity in German manufacturing firms: Does fixed-term employment matter?," International Labour Review, International Labour Organization, vol. 155(4), pages 535-561, December.

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    More about this item

    Keywords

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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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