Heterogeneity matters: temporary employment, productivity and wages in Italian firms

Valeria Cirillo and Andrea Ricci
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Andrea Ricci: National Institute for Public Policies Analysis, INAPP

Economia Politica: Journal of Analytical and Institutional Economics, 2022, vol. 39, issue 2, No 9, 567-593

Abstract: Abstract This study analyses the relationship between flexible employment, productivity and wages, along their distributions. We use an original firm-level dataset, which combines information on workplace characteristics from Rilevazione su Imprese e Lavoro (RIL) with the Analisi Informatizzata delle Aziende Italiane (AIDA) balance sheet information for the universe of Italian non-agriculture/financial corporations. We employ different quantile regression models to panel data and find, first, that use of temporary contracts is associated to a reduction in labour productivity and wages at each point in the corresponding distribution; and second, that the negative relationship between labour productivity and wages decreases in magnitude along the quantiles of the productivity and wage distributions, suggesting that low-productive/low-wage firms use temporary employment to permanently staff positions and to compress labour costs.

Keywords: Labour productivity; Wages; Temporary employment; Firm-level analysis; Quantile regressions (search for similar items in EconPapers)
JEL-codes: J2 J24 J31 L25 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s40888-020-00197-2

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