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Temporary Contracts: An Analysis of the North–South Gap in Italy

Author

Listed:
  • Francesca Modena

    (Bank of Italy, Trento Branch, Economic Research Unit)

  • Silvia Anna Maria Camussi

    (Bank of Italy, Torino Branch, Economic Research Unit)

  • Fabrizio Colonna

    (Bank of Italy, Directorate General for Economics, Statistics and Research)

Abstract

In Italy, the share of temporary employment varies significantly across regions, with higher averages observed in the South. This paper examines the extent to which the North–South gap relates to different firms’ hiring strategies, or rather that it stems from the evolution and the duration of job contracts. Using a unique source of contract-level administrative data, we analyse entry conditions in the labour market and the evolution of temporary positions. Our results suggest that the greater use of fixed-term contracts in the South is not attributable to differences in firms’ hiring strategies. In fact, workers are initially hired on a temporary basis more frequently in the North. The geographical gap, instead, stems from the lower probability that these temporary positions are eventually converted into an open-ended contract. Furthermore, we observe regional variations in the duration of permanent jobs, with shorter durations in the South. There is evidence suggesting that the subsidies implemented in Italy in 2015-2016 to promote permanent employment had positive effects on contract duration.

Suggested Citation

  • Francesca Modena & Silvia Anna Maria Camussi & Fabrizio Colonna, 2024. "Temporary Contracts: An Analysis of the North–South Gap in Italy," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 10(3), pages 1147-1171, November.
  • Handle: RePEc:spr:italej:v:10:y:2024:i:3:d:10.1007_s40797-023-00257-z
    DOI: 10.1007/s40797-023-00257-z
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    More about this item

    Keywords

    Temporary contracts; Contract duration; Conversion rate; Italy;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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