Temporary Employment, Job Flows and Productivity: A Tale of Two Reforms

Lorenzo Cappellari, Marco Leonardi

Research output: Contribution to journalArticlepeer-review

64 Citations (Scopus)

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. 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.
Original languageEnglish
Pages (from-to)F188-F215
JournalEconomic Journal
Volume122
DOIs
Publication statusPublished - 2012

Keywords

  • flexibility

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