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Are temporary hires good or bad for innovation? The Italian evidence

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  • Stefano Dughera
  • Francesco Quatraro
  • Andrea Ricci
  • Claudia Vittori

Abstract

This paper investigates the relationship between temporary workers and innovation. We model a firm’s choice concerning: (i) the mix of temporary and permanent workers; (ii) the optimal level of training intensity that firms choose by best-responding to the worker’s human capital investments. Results suggest that the innovation-enhancing combination of temporary and permanent workers exists and is unique. Using micro-data on Italian firms, we then find that the relationship between the firm-level share of temporary workers and innovation has indeed an inverted U form, in line with our theoretical expectations. This suggests that studies assuming a linear association may oversimplify the complex relationship between non-standard labor and innovation.

Suggested Citation

  • Stefano Dughera & Francesco Quatraro & Andrea Ricci & Claudia Vittori, 2024. "Are temporary hires good or bad for innovation? The Italian evidence," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 33(8), pages 1121-1144, November.
    • Handle: RePEc:taf:ecinnt:v:33:y:2024:i:8:p:1121-1144
    DOI: 10.1080/10438599.2023.2287443
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