Temporary Employment, Job Flows and Productivity: A Tale of Two Reforms
44 Pages Posted: 21 Jul 2011
There are 2 versions of this paper
Temporary Employment, Job Flows and Productivity: A Tale of Two Reforms
Temporary Employment, Job Flows and Productivity: A Tale of Two Reforms
Date Written: July 21, 2011
Abstract
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 favor 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.
Keywords: employment contracts, productivity, institutional changes
JEL Classification: J240, J410
Suggested Citation: Suggested Citation
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