Temporary employment, demand volatility and unions: Firm-level evidence

Francesco Devicienti (), Paolo Naticchioni and Andrea Ricci

No 434, Carlo Alberto Notebooks from Collegio Carlo Alberto

Abstract: This paper investigates the effect of workplace unionization and product market volatility on firms' propensity to use temporary employment. Using Italian firm level data, we show that unionization and volatility have a positive impact on the share of temporary contracts. However, as volatility increases the union effect becomes negative, suggesting that in a highly volatile economic environment unions may be concerned about the weakening of their bargaining power associated with an extensive use of temporary workers. Furthermore, these effects are at work only for the use of non-training temporary contracts, while training temporary contracts are not affected by unions, volatility and their interplay. We argue that this occurs because non-training temporary contracts can be used by firms as a buffer stock to cope with uncertainty and by unions to protect insiders, while training temporary contracts are more likely to be used as a screening device for future permanent positions.

Keywords: unions; temporary workers; training; product demand volatility; firms (search for similar items in EconPapers)
JEL-codes: J23 J24 J51 (search for similar items in EconPapers)
Pages: pages 34
Date: 2015
New Economics Papers: this item is included in nep-eur, nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Journal Article: Temporary Employment, Demand Volatility, and Unions: Firm-Level Evidence (2018)
Working Paper: Temporary Employment, Demand Volatility and Unions: Firm-Level Evidence (2015)
Working Paper: Temporary employment, demand volatility and unions: Firm-level evidence (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cca:wpaper:434

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