IDEAS home Printed from https://ideas.repec.org/p/irs/cepswp/2014-14.html
   My bibliography  Save this paper

Temporary employment, demand volatility and unions: Firm-level evidence

Author

Listed:
  • DEVICIENTI Francesco
  • NATICCIONI Paolo
  • RICCI Andrea

Abstract

This paper investigates the effect of workplace unionization and demand volatility on firms' propensity to use temporary employment. Using Italian firm level data, we show that the impact of unionization crucially depends on the type of fixed term contracts considered and the degree of volatility. The presence of unions per se is found to increase the demand for non-training temporary contracts, while it does not affect the demand for training temporary contracts. We argue that this occurs because non-training temporary contracts are typically used as a buffer stock to cope with uncertainty, and the unions tend to encourage their use to protect insider workers. Training temporary contracts, on the other hand, do not lend themselves to this function, as they are more likely to be used as a screening device for future permanent positions. We also find that, as volatility increases, the unions become more concerned about the weakening of their bargaining power and tend to discourage the hiring of non-training temporary workers.

Suggested Citation

  • DEVICIENTI Francesco & NATICCIONI Paolo & RICCI Andrea, 2014. "Temporary employment, demand volatility and unions: Firm-level evidence," LISER Working Paper Series 2014-14, LISER.
  • Handle: RePEc:irs:cepswp:2014-14
    as

    Download full text from publisher

    File URL: https://www.liser.lu/publi_viewer.cfm?tmp=3784
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alison L. Booth & Marco Francesconi & Jeff Frank, 2002. "Temporary Jobs: Stepping Stones Or Dead Ends?," Economic Journal, Royal Economic Society, vol. 112(480), pages 189-213, June.
    2. Injae Lee & Dong-bae Kim, 2005. "Unions and the use of flexible staffing in korea: evidence from an establishment survey," International Economic Journal, Taylor & Francis Journals, vol. 19(2), pages 223-234.
    3. Susan N. Houseman, 2001. "Why Employers Use Flexible Staffing Arrangements: Evidence from an Establishment Survey," ILR Review, Cornell University, ILR School, vol. 55(1), pages 149-170, October.
    4. Bentolila, S. & Saint-Paul, G., 1995. "A model of labour demand with linear adjustment costs," Labour Economics, Elsevier, vol. 2(1), pages 105-105, March.
    5. repec:tur:wpaper:6 is not listed on IDEAS
    6. Bertil Holmlund & Donald Storrie, 2002. "Temporary Work In Turbulent Times: The Swedish Experience," Economic Journal, Royal Economic Society, vol. 112(480), pages 245-269, June.
    7. Lorenzo Cappellari & Carlo Dell’Aringa & Marco Leonardi, 2012. "Temporary Employment, Job Flows and Productivity: A Tale of Two Reforms," Economic Journal, Royal Economic Society, vol. 122(562), pages 188-215, August.
    8. Luca Nunziata & Stefano Staffolani, 2007. "Short-Term Contracts Regulations And Dynamic Labour Demand: Theory And Evidence," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(1), pages 72-104, February.
    9. Salvatori, Andrea, 2012. "Union threat and non-union employment: A natural experiment on the use of temporary employment in British firms," Labour Economics, Elsevier, vol. 19(6), pages 944-956.
    10. Alison L. Booth & Marco Francesconi, 2003. "Union coverage and non-standard work in Britain," Oxford Economic Papers, Oxford University Press, vol. 55(3), pages 383-416, July.
    11. Damiani, Mirella & Pompei, Fabrizio & Ricci, Andrea, 2011. "Temporary job protection and productivity growth in EU economies," MPRA Paper 29698, University Library of Munich, Germany.
    12. Tito Boeri & Pietro Garibaldi, 2007. "Two Tier Reforms of Employment Protection: a Honeymoon Effect?," Economic Journal, Royal Economic Society, vol. 117(521), pages 357-385, June.
    13. John T. Addison, 2014. "The consequences of trade union power erosion," IZA World of Labor, Institute for the Study of Labor (IZA), pages 1-68, May.
    14. Abraham, Katharine G & Taylor, Susan K, 1996. "Firms' Use of Outside Contractors: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 394-424, July.
    15. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769, October.
    16. Fabio Berton & Francesco Devicienti & Lia Pacelli, 2011. "Are temporary jobs a port of entry into permanent employment?: Evidence from matched employer-employee," International Journal of Manpower, Emerald Group Publishing, vol. 32(8), pages 879-899, November.
    17. James Costain & Juan F. Jimeno & Carlos Thomas, 2010. "Employment fluctuations in a dual labour market," Economic Bulletin, Banco de España;Economic Bulletin Homepage, issue APR, April.
    18. David H. Autor, 2003. "Outsourcing at Will: The Contribution of Unjust Dismissal Doctrine to the Growth of Employment Outsourcing," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 1-42, January.
    19. O Blanchard & A Landier, 2002. "The Perverse Effects of Partial Labour Market Reform: fixed--Term Contracts in France," Economic Journal, Royal Economic Society, vol. 112(480), pages 214-244, June.
    20. Fabio Berton & Francesco Devicienti & Lia Pacelli, 2009. "Are Temporary Jobs a Port of Entry into Permanent Employment? Evidence from Matched Employer-Employee Data," Working papers 06, Former Department of Economics and Public Finance "G. Prato", University of Torino.
    21. Cynthia L. Gramm & John F. Schnell, 2001. "The Use of Flexible Staffing Arrangements in Core Production Jobs," ILR Review, Cornell University, ILR School, vol. 54(2), pages 245-258, January.
    22. Andrea Caggese & Vicente Cuñat, 2008. "Financing Constraints and Fixed-term Employment Contracts," Economic Journal, Royal Economic Society, vol. 118(533), pages 2013-2046, November.
    23. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
    24. Mirella Damiani & Andrea Ricci, 2014. "Decentralised bargaining and performance-related pay: Evidence from a panel of Italian firms," International Journal of Manpower, Emerald Group Publishing, vol. 35(7), pages 1038-1058, September.
    25. repec:iza:izawol:journl:y:2014:p:68 is not listed on IDEAS
    26. Marco Lilla & Stefano Staffolani, 2012. "Young Entrants, Temporary Jobs and Career Opportunities: Short-Term Perspectives of Young Italian Workers," Rivista di statistica ufficiale, ISTAT - Italian National Institute of Statistics - (Rome, ITALY), vol. 14(1), pages 50-60, October.
    27. Michele Battisti & Giovanna Vallanti, 2013. "Flexible Wage Contracts, Temporary Jobs, and Firm Performance: Evidence From Italian Firms," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(3), pages 737-764, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:gam:jsusta:v:10:y:2018:i:2:p:490-:d:131554 is not listed on IDEAS
    2. Burdín, Gabriel & Pérotin, Virginie, 2016. "Employee Representation and Flexible Working Time," IZA Discussion Papers 10437, Institute for the Study of Labor (IZA).
    3. Andrea Bassanini & Eve Caroli & François Fontaine & Antoine Rebérioux, 2018. "Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms," PSE Working Papers halshs-01724188, HAL.
    4. Marianna Belloc & Paolo Naticchioni & Claudia Vittori, 2018. "Urban Wage Premia, Cost of Living, and Collective Bargaining," CESifo Working Paper Series 7253, CESifo Group Munich.

    More about this item

    Keywords

    Unions; temporary workers; tarining; product demand volatility; firms;

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:irs:cepswp:2014-14. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Library and Documentation). General contact details of provider: http://edirc.repec.org/data/cepsslu.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.