Are Alternative Work Arrangements a Substitute for Standard Employment? Evidence from Worker-Level Data

Bernardo Fanfani and Filippo Passerini ()
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Filippo Passerini: Catholic University Milan

No 17399, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This study analyses the impact of vouchers, an Italian alternative work arrangement, on earnings of atypical workers. We investigate whether this form of very flexible casual work substitutes for income from more standard labor contracts and from employment insurance programs. We rely on panel data estimators and a difference-in-differences specification that exploits a plausibly exogenous variation in the use of vouchers. Results show that around 50% of reductions in earnings from vouchers can be compensated by an increase in income derived from standard labor contracts and, to a much lower extent, by higher income from employment insurance. However, when considering a sub-sample of intensive users, only around 10% of losses in earnings from vouchers are compensated by other income sources. Thus, policies aiming at restricting or abolishing alternative work arrangements should be complemented by targeted interventions, particularly on intensive users, in order to mitigate the short-run earning losses of atypical workers.

Keywords: alternative work arrangements; policy evaluation; labor supply; cross-income elasticity; sample selection; difference-in-differences; event-study (search for similar items in EconPapers)
JEL-codes: C13 C21 D12 J22 J24 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2024-10
New Economics Papers: this item is included in nep-iue and nep-lma
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