The productivity effect of permanent and temporary labor contracts in the Italian manufacturing sector

William Addessi

Economic Modelling, 2014, vol. 36, issue C, 666-672

Abstract: This paper studies the effect of permanent and temporary labor contracts on both labor-augmenting and TFP-augmenting technological factors using a panel dataset of Italian manufacturing firms. The empirical analysis applies a structural approach in which firm TFP follows a controlled Markov process that is affected by the relative use of labor contracts, and labor services are perfect substitutes but with different labor-augmenting factors. The empirical results show that when including labor-contract composition in the TFP process: i) the difference between permanent and temporary contracts in the labor-augmenting productivity factor is not significant and ii) the incidence of permanent contracts in total contracts has a positive effect on TFP dynamics.

Keywords: Total factor productivity; Labor productivity; Permanent and temporary labor contracts (search for similar items in EconPapers)
JEL-codes: D24 J24 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:36:y:2014:i:c:p:666-672

DOI: 10.1016/j.econmod.2013.09.054

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