Earnings Instability and Tenure

Lorenzo Cappellari, Marco Leonardi

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)

Abstract

We study the effect of tenure on earnings instability in Italy using the reforms of temporary employment contracts which affected the average tenure of workers differentially across cohorts. We develop a model of earnings dynamics and exploit the variation of tenure and instability over time and across birth cohorts to estimate policy-relevant parameters. Our results indicate that each year of tenure on the job reduces earnings instability by 11%; the drop is faster in the first three years of the match. Workers on a temporary contract have an earnings instability up to 100% higher than workers on a permanent contract.
Original languageEnglish
Pages (from-to)202-234
Number of pages33
JournalTHE SCANDINAVIAN JOURNAL OF ECONOMICS
DOIs
Publication statusPublished - 2016

Keywords

  • Earnings Instability

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