Labour Market Dynamics

Temporary work represents a growing share of the employed workforce in many European countries. Several reasons stand behind this development. From the employers perspective, the availability of temporary jobs is tantamount to a reduction of wage and firing costs, which is particularly valuable in an uncertain environment where ordinary jobs are characterized by high employment protection.

Temporary jobs can be attractive from the labour supply standpoint too: they may allow a reduction of the unemployment duration and contribute to a decline in the unemployment rate of the weakest segments of the labour force. In addition, temporary jobs may represent a port of entry to more stable career paths and be useful for reaching a better combination of work and family life, although the literature seems to be less unanimous on this last point. However, people in such flexible working arrangements may be at risk of experiencing precarious career paths and, at the extreme, exclusion from the labour market. All over Europe, temporary jobs are often associated with poorer labour conditions. All this reinforces the concerns that, overall, temporary jobs may be lower quality jobs. Furthermore, the literature does not support the claim that workers choose a flexible career, made of repeated temporary employment spells. Hence an important question becomes "are temporary jobs a port of entry toward open ended contracts or do the workers run the risk of being trapped into temporary jobs?"

From a slightly different perspective, the availability of temporary and often cheaper jobs, whose expected duration is often short, may reduce the investment in human capital made on the job both by employers and employees. Has this an impact on firm performance? On its R&D activity? On its ability to compete on the foreign markets? At the macroeconomic level, what is the net total effect of the introduction of temporary work on employment rate and on GDP growth?

Projects in this area aim at contributing to this debate, providing fresh empirical evidence both on Italy and in a cross-country perspective.