Corresponding author: Lorenzo Cappellari, Catholic University of Milan and IZA, Largo Gemelli 1, I-20123, Milan, Italy. E-mail: firstname.lastname@example.org.
Temporary Employment, Job Flows and Productivity: A Tale of Two Reforms*
Version of Record online: 13 AUG 2012
© 2012 The Author(s). The Economic Journal © 2012 Royal Economic Society
The Economic Journal
Volume 122, Issue 562, pages F188–F215, August 2012
How to Cite
Cappellari, L., Dell’Aringa, C. and Leonardi, M. (2012), Temporary Employment, Job Flows and Productivity: A Tale of Two Reforms. The Economic Journal, 122: F188–F215. doi: 10.1111/j.1468-0297.2012.02535.x
We thank Tito Boeri, Juan Dolado, Michael Kvasnicka and three anonymous referees for providing extended comments on the paper and seminar participants at Catholic University of Milan, AIEL, EALE-SOLE, ESPE, the FEDEA/FRDB/IZA Conference on ‘Dual Labor Markets and the Single Contract’ and the IAB Workshop on ‘Labour Market Flexiblility-Boone or Bane?’ for useful remarks. We are also grateful to Domenico Mauriello of Unioncamere for his help with the Excelsior-Asia data. The usual disclaimers apply.
- Issue online: 13 AUG 2012
- Version of Record online: 13 AUG 2012
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. Our results show 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 favour of external staff and reduced capital intensity, generating productivity losses. We estimate substitution elasticities across various types of temporary contracts that are consistent with this interpretation.