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Getting Out of the Starting Gate on the Right Foot: Employment Effects of Investment in Human Capital

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  • Agata MAIDA
  • Daniela SONEDDA

Abstract

The technological progress and the globalisation process reshape the nature of jobs inducing a substantial drop in the incidence of permanent employment occupations. This paper estimates whether employers could be less reluctant to hire workers on a permanent basis in presence of a human capital investment, which they partly finance. We find that the permanent employment rate of cohorts affected by law no. 92/2012 at the age threshold of 30 years increased by about 1% when compared to the permanent employment rate of similar untreated cohorts. This difference in discontinuity impact can be generated by the vocational apprenticeship labour contract only. After 36 months from the baseline, this positive effect persists and increases to about 5%. We interpret our results as evidence that a labour contract that invests in human capital serves as a stepping stone into permanent employment.

Suggested Citation

  • Agata MAIDA & Daniela SONEDDA, 2019. "Getting Out of the Starting Gate on the Right Foot: Employment Effects of Investment in Human Capital," Departmental Working Papers 2019-03, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    • Handle: RePEc:mil:wpdepa:2019-03
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    2. Daniela Sonedda, 2020. "Same rules but different outcomes: regional disparities in permanent employment rates of a nation-wide reform of vocational apprenticeships," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(2), pages 583-620, July.
    3. Daniela Sonedda, 2020. "Guess who's there: employment protection legislation and the degree of substitutability between labour contracts," IAAEU Discussion Papers 202007, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    4. Sonedda, Daniela, 2018. "Human capital investment and job creation: the role of the education and production systems," MPRA Paper 91902, University Library of Munich, Germany.

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    More about this item

    Keywords

    Human Capital; Apprenticeship; Permanent employment;
    All these keywords.

    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
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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