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Heterogeneous Effects of Temporary Employment on Productivity and Wages in the Italian Business Firms

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  • Andrea Ricci

Abstract

What is the link between flexible employment, labour productivity and wages? Taking advantage of an original firm level database combining information from Rilevazione Imprese e Lavoro (RIL) conducted by INAPP on a representative sample of Italian firms with the AIDA archive, we explore the nexus between temporary employment, labour productivity and wages along the distributions of labour productivity and wages. By applying conditional quantile technique with additive fixed effects, we detect a strong negative relationship between the use of fixed-term contracts and both labour productivity and wages. The effect of temporary employment on firms’ labour productivity and wages is heterogeneous along the distributions. Low-productive firms - recurring more to temporary contracts - are also more affected by an incremental use of short-term work arrangements risking to be trapped in a vicious cycle of low-productivity and low-wages.

Suggested Citation

  • Andrea Ricci, 2020. "Heterogeneous Effects of Temporary Employment on Productivity and Wages in the Italian Business Firms," Working Papers 0050, ASTRIL - Associazione Studi e Ricerche Interdisciplinari sul Lavoro.
    • Handle: RePEc:ast:wpaper:0050
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    Cited by:

    1. Cirillo, Valeria & Evangelista, Rinaldo & Guarascio, Dario & Sostero, Matteo, 2021. "Digitalization, routineness and employment: An exploration on Italian task-based data," Research Policy, Elsevier, vol. 50(7).
    2. Sandrini, Luca, 2021. "Incentives for labour-augmenting innovations in vertical markets: The role of wage rate," International Journal of Industrial Organization, Elsevier, vol. 75(C).

    More about this item

    Keywords

    Labour productivity; Wages; Temporary employment; Firm-level analysis;
    All these keywords.

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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