Interlocking complementarities between job design and labour contracts

Luca Cattani, Stefano Dughera () and Fabio Landini
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Stefano Dughera: University of Turin
Fabio Landini: University of Parma

Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, 2023, vol. 9, issue 2, No 4, 528 pages

Abstract: Abstract In this paper, we study the existence of interlocking complementarities between job design and labour contract at the firm level. Using a formal model, we show that firms face two organizational equilibria: one in which job designs with high routine task intensity are matched with a large use of non-standard contracts; and the other in which low routine task intensity combines with a small use of non-standard contracts. These complementarities exist because while non-standard contracts allow firm to adjust to external shocks, they also provide little incentive to invest in firm-specific knowledge. We test this prediction using linked-employer-employee data from the Emilia-Romagna region. The evidence is consistent with our theory: the use of non-standard contracts is positively associated with routine task intensity at the firm level. This result holds controlling for a wide range of firm-specific and contextual covariates and it is robust to alternative estimation methods (OLS, panel and IV).

Keywords: Non-standard employment; Labour contract; Job design; Organizational equilibria (search for similar items in EconPapers)
JEL-codes: D22 J41 L23 M54 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s40797-022-00192-5

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