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Exuberant proclivity towards non-standard employment: evidence from linked employer-employee data

Alessandro Arrighetti (), E. Bartoloni (), F. Landini () and Chiara Pollio ()

No 2019-EP02, Economics Department Working Papers from Department of Economics, Parma University (Italy)

Abstract: In most industrialized countries temporary and non-standard forms of employment (NSFE) have become a pervasive feature of the labor market. However, at the firm level, the diffusion of NSFE is less uniform than expected: while some firms exhibit high propensity to use NSFE, others make no use of it. Most conventional explanations of NSFE use (market uncertainty, production regimes, competitive pressure) fail to account for such heterogeneity. In this article the authors develop an alternative explanation that links the use of NSFE to firm-specific availability of managerial resources: whenever the latter are relatively scarce, firms make larger use of NSFE to reduce coordination and operating costs. Using a linked employer-employee panel of manufacturing firms from the Emilia-Romagna region (Italy), the authors provide empirical support for this hypothesis. The result is robust to different estimation strategies and controlling for alternative drivers of NSFE use. This novel finding suggests that, the use of NSFE has strong managerial roots: it allows firms to compensate for firm-specific managerial weaknesses.

Keywords: non-standard employment; managerial resources; span of control; firm heterogeneity (search for similar items in EconPapers)
JEL-codes: D22 L23 M51 M52 J41 J23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur and nep-lma
Date: 2019
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