Abstract
Short‐term employment contracts have been deployed rapidly across European countries in the past decades. In this paper we suitably modify a known search and matching theoretical framework to quantify the effects of temporary contracts reforms on the present discounted value of the utility of junior and senior workers. We calibrate the model using data from Italy and find that while senior workers may benefit or not from the diffusion of temporary contracts depending on the productivity of the match, the utility of junior workers is always lower in the presence of temporary employment. This result is ascribable to the high rates of turnover associated with temporary contracts which offset the benefits of the increased labour market flexibility.
Original language | English |
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Pages (from-to) | 751-793 |
Number of pages | 43 |
Journal | Manchester School |
Volume | 87 |
Issue number | 6 |
Early online date | 3 Feb 2019 |
DOIs | |
Publication status | Published - Dec 2019 |
ASJC Scopus subject areas
- Economics and Econometrics
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Cristina Tealdi
- School of Social Sciences - Professor
- School of Social Sciences, Edinburgh Business School - Professor
Person: Academic (Research & Teaching)