Abstract:
What is the link between flexible employment, labour productivity and wages? Taking
advantage of an original firm level database combining information from Rilevazione
Imprese e Lavoro (RIL) conducted by INAPP on a representative sample of Italian firms
with the AIDA archive, we explore the nexus between temporary employment, labour
productivity and wages along the distributions of labour productivity and wages. By
applying conditional quantile technique with additive fixed effects, we detect a strong
negative relationship between the use of fixed-term contracts and both labour productivity
and wages. The effect of temporary employment on firms’ labour productivity and wages is heterogeneous along the distributions. Low-productive firms - recurring more to temporary contracts - are also more affected by an incremental use of short-term work arrangements risking to be trapped in a vicious cycle of low-productivity and low-wages.
