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Stepping Stones versus Dead End Jobs: Exits from Temporary Contracts in Italy after the 2003 Reform

Giovanni Bruno (), Floro Caroleo () and Orietta Dessy

No 6746, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper we study labor market transitions out of temporary jobs in Italy focussing on an interesting period of the Italian recent history: the one immediately following the last labor market reform aimed at flexibilizing and liberalizing the Italian labor market by a widespread use of temporary work arrangements in 2003, and immediately preceding the economic downturn starting in the second half of 2007. The data-set used is the 2004-2007 IT-SILC individual panel. We apply a discrete-time duration analysis and estimate a competing-risk model for assessing to which extent, and for whom, starting a temporary job after 2004 results within a 3-years span in a stepping stone to permanent employment rather than a dead end out of the labor market or in precarious jobs. We find that temporary contracts have a positive impact only on men's transitions to permanent employment. School leavers, workers in the South, as well as women, are instead rather penalized after a temporary job. They have an higher probability to remain trapped in temporary contracts than men and an higher probability of exiting the labour market. In particular, school leavers entering the labour market with a temporary contract experience relatively high exit-rates to non-employment just after the first year of the contract.

Keywords: discrete duration data; temporary jobs; mixed multinomial logit (search for similar items in EconPapers)
JEL-codes: J24 C41 C33 C35 J6 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2012-07
New Economics Papers: this item is included in nep-lab and nep-lma
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Published in: Rivista Internazionale di Scienze Sociali, 2013, 1, 31-60

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