Labour Market Deregulation And Workers’ Prospects At The Beginning Of The Career: Evidence From Italy

Exploiting an innovative longitudinal individual dataset, we evaluate early career of a sample of Italian workers who attained the tertiary degree between 1998 and 2005 and estimate whether the career patterns changed after the reform that deregulated fixed-term arrangements in 2001. Assuming that the year of graduation is exogenous to the reform, we compare the first six years of the career of those who attained the degree before and after 2001, taking into account short- and medium-term individual outcomes in the labour market. We find that the searching time for the first job reduces for those graduated after 2001, while these individuals start working more frequently through atypical and fixed-term arrangements. Furthermore, those graduated after 2001 worsen their economic condition with respect to the previous cohort as their weekly wages – both at the entry and after six-years– significantly drop. However, no significant differences between the two cohorts along the first phase of the career emerge as concerns yearly working weeks and annual earnings.