Heterogeneity matters: temporary employment, productivity and wages in Italian firms
- PDF / 742,144 Bytes
- 27 Pages / 439.37 x 666.142 pts Page_size
- 41 Downloads / 173 Views
Heterogeneity matters: temporary employment, productivity and wages in Italian firms Valeria Cirillo1 · Andrea Ricci2 Received: 23 September 2019 / Accepted: 24 August 2020 © The Author(s) 2020
Abstract This study analyses the relationship between flexible employment, productivity and wages, along their distributions. We use an original firm-level dataset, which combines information on workplace characteristics from Rilevazione su Imprese e Lavoro (RIL) with the Analisi Informatizzata delle Aziende Italiane (AIDA) balance sheet information for the universe of Italian non-agriculture/financial corporations. We employ different quantile regression models to panel data and find, first, that use of temporary contracts is associated to a reduction in labour productivity and wages at each point in the corresponding distribution; and second, that the negative relationship between labour productivity and wages decreases in magnitude along the quantiles of the productivity and wage distributions, suggesting that low-productive/ low-wage firms use temporary employment to permanently staff positions and to compress labour costs. Keywords Labour productivity · Wages · Temporary employment · Firm-level analysis · Quantile regressions JEL Classification J2 · J24 · J31 · L25
1 Introduction Productivity growth has been weak in Italy since the late 1990s. Several concurrent phenomena contribute to explaining the slowdown of productivity growth in the Italian economy including segmentation of the productive system as the result of increasing firm heterogeneity (Bugamelli et al. 2018). The empirical evidence suggests that there are two groups of firms. One is characterized by a large population * Valeria Cirillo [email protected] 1
Department of Political Sciences, University of Bari “Aldo Moro”, Piazza Cesare Battisti 1, 70121 Bari, Italy
2
National Institute for Public Policies Analysis, INAPP, Corso d’Italia, 33, 00198 Rome, Italy
13
Vol.:(0123456789)
Economia Politica
of micro-enterprises with a low propensity to invest in innovation and human capital and internationalization, and weak financial structures. The other is a relatively small group of firms, mostly medium and large-sized, whose efficiency, performance and productive strategies are comparable to European competitors (Dosi et al. 2012; Calligaris et al. 2016). Average wages have either stagnated or declined since the 1990s and were disrupted in a major way by the 2008 financial crisis. However, the dispersion of wages both within and between firms (and sectors) has increased significantly over time (Card et al. 2018; International Labour Organization 2017). This is evidence of the coexistence of high-wage and low-wage firms which is reflected in the increasing segmentation and heterogeneity of their productive behaviours. The economic literature provides extensive discussion of sources of the observed changes to labour productivity, the wages distribution and the increased role of firm heterogeneity. They range from supply side explanations,
Data Loading...
