Earnings Instability and Tenure

Lorenzo Cappellari and Marco Leonardi

No ieil0048, DISCE - Quaderni dell'Istituto di Economia dell'Impresa e del Lavoro from Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE)

Abstract: This paper develops a tractable empirical approach to estimate the effect of on-the-job tenure on the permanent and transitory variance of earnings. The model is also used to evaluate the earnings instability associated with fixed-term contract (short-tenure contracts) in Italy. Our results indicate that each year of tenure on the job reduces earnings instability on average by 15%. Workers on a fixed-term contract on average have an earnings instability 10% higher than workers on a permanent contract. Workers who spend their entire working life on fixed-term contracts can expect an earnings instability twice as high.

Keywords: earnings instability; earnings dynamics; tenure; temporary contracts; minimum distance estimation. (search for similar items in EconPapers)
JEL-codes: C23 J21 J31 (search for similar items in EconPapers)
Pages: 31
Date: 2007-03
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Related works:
Journal Article: Earnings Instability and Tenure (2016)
Working Paper: Earnings Instability and Tenure (2013)
Working Paper: Earnings instability and tenure (2007)
Working Paper: Earnings Instability and Tenure (2006)
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