Addabbo y Solinas (2012) - Non-Standard Employment and Quality of Work, The Case of Italy

AIEL Series in Labour Economics
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Tindara Addabbo Giovanni Solinas
•
Editors
Non-Standard Employment
and Quality of Work
The Case of Italy
Prof. Tindara Addabbo Prof. Giovanni Solinas
Department of Economics Department of Economics
University of Modena and Reggio Emilia University of Modena and Reggio Emilia
Viale Berengario 51 Viale Berengario 51
41121 Modena 41121 Modena
Italy Italy
tindara.addabbo@unimore.it giovanni.solinas@unimore.it
ISSN 1863-916X
ISBN 978-3-7908-2105-5 e-ISBN 978-3-7908-2106-2
DOI 10.1007/978-3-7908-2106-2
Springer Heidelberg Dordrecht London New York
Library of Congress Control Number: 2011937432
Ó Springer-Verlag Berlin Heidelberg 2012

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Acknowledgment
This edited volume has been made possible with the contribution of Associazione
Italiana Economisti del Lavoro (AIEL).
v
Contents
1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Tindara Addabbo and Giovanni Solinas
Part I Non-Standard Employment, Labour Supply

and Living Conditions
2 A Microeconometric Analysis of Female Labour Force

Participation in Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Massimiliano Bratti and Stefano Staffolani
3 Balancing Work and Family: New Mothers’ Employment

Decisions During Childbearing . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Andrea Neri, Martina Lo Conte and Piero Casadio
4 Part-Time and Temporary Employment:

A Gender Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Tindara Addabbo and Donata Favaro
Part II Non-Standard Employment, Workers’ Mobility

and Labour Market Structure
5 The Quality of Temporary Work . . . . . . . . . . . . . . . . . . . . . . . . 79

Gianna Barbieri and Paolo Sestito
6 Temporary Help Workers in Italy. Where Do They Come From

and Where Do They Go? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Federica Origo and Manuela Samek Lodovici
vii
viii Contents
7 The Dynamics of Unemployment, Temporary

and Permanent Employment in Italy. . . . . . . . . . . . . . . . . . . . . . 127
Matteo Picchio
8 Labour Market Segmentation, Flexibility and Precariousness

in the Italian North East. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
Giuseppe Tattara and Marco Valentini
Part III Part-Time Employment, Working Conditions

and Job Attributes
9 Quality of Work: The Case of Part-Time Work in Italy . . . . . . . 175

Brendan J. Burchell
10 Does Part-Time Mean Part-Satisfaction? . . . . . . . . . . . . . . . . . . . 189

Sara Depedri
11 Workers’ Lifestyle Choices, Working Time

and Job Attributes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
Giovanni Russo and Edwin van Hooft
Part IV Non-Standard Employment, Quality of Work

and Firms’ Outcomes
12 Non-Standard Employment and Quality of Work:

Towards New Forms of Measurement . . . . . . . . . . . . . . . . . . . . . 233
13 Is There a Trade-Off Between Labour Flexibility

and Productivity Growth? Some Evidence from Italian Firms . . . 261
Federico Lucidi
About the Editors
Tindara Addabbo (e-mail: tindara.addabbo@unimore.it) is Associate Professor

of Economic Policy at the University of Modena and Reggio Emilia (Italy). She is
member of CAPP (Centre for the Analysis of Public Policies), CHILD (Center for
Household, Income Labor and Demographic economics) RECent (Center for
Economic Research) and of the Scientific Committee of Fondazione Marco Biagi.
She has published in the areas of the gender impact of public and social policies,
measurement of well-being in the capability approach, employment and wage
discrimination by gender, income distribution and quality of work.
Giovanni Solinas (e-mail: giovanni.solinas@unimore.it) is Full Professor of

Economics at the University of Modena and Reggio Emilia (Italy). He is currently
one of the directors of studies of the B.A. course in International Economics and
Marketing (Faculty of Economics of Modena and Reggio Emilia), scientific
director of the Library of Economics ‘Sebastiano Brusco’, member of the Scien-
tific Committee of Fondazione Giacomo Brodolini (Roma), Fondazione Marco
Biagi (Modena), ILO (Industrial Liaison Office, University of Modena and Reggio
Emilia), and Capp (Centre for the Analysis of Public Policies).
His main research interests are in industrial economics, labour economics and
evaluation of public policies. In these fields he has been author and editor of books
and had papers published in both national and international journals. He has been
scientific director and researcher member in several European programs and
projects.
ix
Contributors
Tindara Addabbo Department of Economics, University of Modena and Reggio

Emilia, Italy, e-mail: tindara.addabbo@unimore.it
Gianna Barbieri Ministry of Education, Statistical Unit, Rome, Italy, e-mail:
gianna.barbieri@istruzione.it
Massimiliano Bratti Dipartimento di Scienze Economiche Aziendali e Statistiche,
Università degli Studi di Milano, Milan, Italy, e-mail: massimiliano.bratti@unimi.it
Brendan J. Burchell Department of Sociology, University of Cambridge,
Cambridge, UK, e-mail: bb101@cam.ac.uk
Piero Casadio Economic Research Department, Bank of Italy, Rome, Italy,
e-mail: piero.casadio@bancaditalia.it
Sara Depedri Department of Economics, University of Trento, Trento, Italy,
e-mail: sara.depedri@economia.unitn.it
Donata Favaro Department of Economics M. Fanno, University of Padova,
Padova, Italy, e-mail: donata.favaro@unipd.it
Martina Lo Conte Social Statistics Department, Istat, Istituto Nazionale di
Statistica, Rome, Italy, e-mail: loconte@istat.it
Federico Lucidi Fondazione Giacomo Brodolini, Rome, Italy, e-mail: lucidi@
fondazionebrodolini.it
Andrea Neri Economic Research Department, Bank of Italy, Rome, Italy, e-mail:
andrea.neri@bancaditalia.it
Federica Origo Department of Economics ‘‘Hyman P. Minsky’’, University of
Bergamo, Bergamo, Italy, e-mail: federica.origo@unibg.it
Matteo Picchio Department of Economics, CentER, ReflecT, Tilburg University,
Tilburg, The Netherlands, e-mail: m.picchio@uvt.nl
xi
xii Contributors
Giovanni Russo CEDEFOP, Finikas, Thessaloniki, Greece, e-mail: giovanni.

russo@cedefop.europa.eu
Manuela Samek Lodovici Istituto per la Ricerca Sociale IRS, Milan, Italy,
e-mail: msamek@irsonline.it
Paolo Sestito Department for Structural Economic Analysis, Bank of Italy, Rome,
Italy, e-mail: paolo.sestito@bancaditalia.it
Giovanni Solinas Department of Economics, University of Modena and Reggio
Emilia, Italy, e-mail: giovanni.solinas@unimore.it
Stefano Staffolani Department of Economics, Marche Polytechnic University,
Ancona, Italy, e-mail: s.staffolani@univpm.it
Giuseppe Tattara Department of Economics, University Cà Foscari, Venezia,
Italy, e-mail: tattara@unive.it
Marco Valentini Tolomeo Studi e Ricerche srl, Treviso, Italy, e-mail: marco.
valentini@tolomeoricerche.it
Edwin A. J. van Hooft University of Amsterdam, Amsterdam, The Netherlands,
e-mail: e.a.j.vanhooft@uva.nl
Chapter 1
Introduction
The recession following the worldwide economic crisis has also taken its toll on
the Italian economy. National product has fallen by around 7 points: in 2009
product in terms of volume returned to the same level as it was the start of the
millennium. This has had clear consequences on the labour market (Cingano et al.
2010). Between the second quarter of 2008 and the fourth quarter of 2009, the
number of employed fell by 560,000 people, most of whom with fixed-term
contracts or with forms of subordinate employment concealed as autonomous
employment. The recovery in 2010 was marginal (+40,000 people). It is estimated
that the number of hours of cassa integrazione (‘‘redundancy fund’’) claimed on an
annual basis is equivalent to that of around 500,000 full-time workers. The
unemployment rate has reached 8.7% of the labour force (10% among women),
including workers without employment contracts, as estimated by Istat (the Italian
national institute of statistics).
If we make use of broader ranging indicators of the underuse of the labour force
(which along with the unemployed, include workers drawing wages from the
redundancy fund, those not actively seeking employment, being certain of not
finding any), the underuse of the work force stands at over 11% of those poten-
tially employable. This is less than France and Spain, but more than the UK and
Germany (Bank of Italy 2011).
Despite having gradually spread to all the forms of employment contract, the
negative impact of the crisis on a number of non-standard positions has been
particularly harsh: the Istat 2010 Labour Force Survey (LFS) shows that 63% of
T. Addabbo (&) G. Solinas (&)

Department of Economics, University of Modena and Reggio Emilia, Viale Berengario
51, 41121 Modena, Italy
e-mail: tindara.addabbo@unimore.it
G. Solinas
e-mail: giovanni.solinas@unimore.it
T. Addabbo and G. Solinas (eds.), Non-Standard Employment and Quality of Work, 1

AIEL Series in Labour Economics, DOI: 10.1007/978-3-7908-2106-2_1,
2 T. Addabbo and G. Solinas
the overall fall in employment may be attributed to fixed-term contracts and

(autonomous) collaboration contracts: in 2009 alone, these forms of employment
fell by 240,000 compared to a fall in the number of standard work contracts of
139,000. Compared to the average levels found in Europe during the crisis, the
reduction of fixed-term employment appears to be more accentuated in Italy.
Furthermore, during the crisis there appears to be a greater likelihood of leaving a
non-typical job for unemployment or inactivity as well as a reduction in the job
stabilisation rate (greater among men, despite the fact that the probability of
moving into a permanent contract from a non-typical position is significantly lower
among women).
In this sense, even though for the first time after 4 years the incidence of non-
standard work on the employment total has fallen, the crisis tends to accentuate the
dualism between those jobs with a high level of protection and the unprotected
jobs to be found in the Italian labour market (Istat 2010).
The unprotected segment in Italy is one of sizeable proportions. The most
conservative estimates suggest that in Italy, the field of temporary labour in 2009
covered 12% of employees. If these are added to the irregular working positions—
estimated by Istat at around 12% of the overall working contracts, the conclusion
must be drawn that no fewer than one worker out of four belongs to the area of low
or no protection (Istat 2011).
There is an aspect in which the labour market conditions in Italy are among the
worst in the highly developed nations: the concentration of precarious work and
unemployment among the young. Today in Italy, with the crisis in full swing, little
below one young adult out of three (28.9% in the fourth quarter of 2010) is
unemployed. This is a young unemployment rate above that of Eurozone countries
(which in November 2010 stood at 20.7% compared to 29.9% in Italy, Eurostat,
2011) and that, in a number of parts of the South, fluctuates around 40%. Only
between 2007 and 2009, young unemployment rose by almost 10%: much more
than in other advanced economies.
This trend may not be put down to demography: the cohorts of young people
entering the labour market, in relation to the active population, are far smaller in
dimensional terms compared to other economies. And neither does it derive from
the intensity with which the fall in recruitment levels has emerged during the
recession. The insurgence of such a high level of young unemployment is down to
the fact that the first jobs to go when companies need to make cuts are those with
fixed-term contracts. Along with immigrant workers, young adults are the first to
be made redundant. In other terms, just like in all the other economies with a two-
tier work market, the crisis is paid for by the weakest subjects and, among national
workers, by the young.
Fixed-term contracts, along with a wide range of forms of ‘bogus self-employ-
ment’, have become the most common entrance path to the labour market. Before the
crisis, no less than 70% of recruitment took place using these forms of contract.
Throughout the recession, in all likelihood this level has become even higher.
Starting from the second half of the 1990s, the general diffusion of flexible
contracts, supported by a number of legislative interventions, was certainly one of
1 Introduction 3
the factors that fostered the rise of employment at a rate which, in the previous
decade, was greater than that of the main Eurozone countries. But in rather more
favourable cyclical conditions than those currently to be found, it also ushered in
what many came to see as a ‘normal’ situation of the alternation between work and
non-work, i.e. between work and unemployment. Given than the system of social
safety nets and redundancy pay varies on the basis of the previous employment
position (in terms of company size and forms of contract), this alternation incurs
higher costs for non-standard workers and people with intermittent working pro-
files. This is a phenomenon which has non-transitory effects on individual careers.
For the very reason that the use of temporary forms of employment is so common
(and levels of permanent employment are more or less static), the likelihood of
moving from fixed-term to permanent contracts is relatively low: this passage
concerns one contract out of 10 in the field of company employment, and much
less in the sphere of para-subordinate work. Furthermore, the likelihood of sta-
bilisation, which has fallen notably over the course of the crisis, particularly
among males with fixed-term contracts, appears systematically lower among
women (Istat 2010). At the same time, the likelihood of them losing their jobs is
around eight times higher than that of other workers. But the risk is not simply that
of a fragmented working career. If one considers that workers with fixed-term
contracts, with similar individual characteristics, are paid on average 30% less
than permanent workers, that many contractual institutions provide lower social
security contributions, a low probability of transition from precarious work to
stable work and ongoing experiences of unemployment outline a real danger of
getting stuck in the mechanism for a substantial share of one’s working career.
This may be found especially among low-income groups and those with very low
protection standards, with obvious consequences on life choices, the possibility of
starting one’s own family without depending on one’s family of origin, having or
not having children and so on.
What makes young people’s prospects even less bright is the effects on work
training. Not only is the level of return of scholastic education lower among
temporary workers than permanent workers, but they also receive less training on
the workplace. For a young worker with a fixed-term contract, the likelihood of
being trained on the job is 30% lower than that of a young worker employed on a
permanent basis. Temporariness is a strong incentive not to invest in training, both
for the company and for the worker. This worsens the situation for precariously
employed young people on the labour market and contributes to reducing their
perspectives of future income.
The impact is strong not only on short and mid-term income expectations, but
also on the expected pension income. The contributory system has stressed the
weight of entrance conditions: a worker whose career is broken up over the course
of a decade, even when at the end of his/her working life s/he manages to put
together a good contributory seniority, his/her pension will be very low, often not
far over the minimum pension (Berton et al. 2009).
In the decade leading up to the crisis, as the increases in employment largely
concerned women, the fragmentary career, the alternating between work and
unemployment, less workplace training and the lowering of work and pension
incomes are all phenomena that feature clear gender-based differences. The Istat
LFS (2009 average) confirms that female employment is largely centred around
non-standard work contracts. 14% of employed women, compared to 9% of men,
have a fixed term or ongoing collaboration work contract (our own elaborations of
Istat data, 2010, Table 3.3).
Part-time work is to be found in particular among women (23% of employed
women against 4% of employed men). When it is not desired, from many points of
view, part-time work (along with undeclared work and fixed-term contracts) also
constitutes one of the components of the secondary and largely unprotected
market. During the crisis, the use of involuntary part-time has tangibly increased,
while voluntary part-time has fallen (Istat 2010).
In Italy, the greater likelihood of women being employed in non-standard
working positions is associated with a lower likelihood of women contributing to
the labour market at all. The female employment rate in 2003 stood at 42.7%, and
despite increasing to reach 47.2% in 2008, it is still decidedly below the European
average for the same year (59.1% in EU-27; European Commission, 2010). The
crisis in Italy has led to a slower fall in male employment and a more rapid one in
female occupation compared to the European average, thus contributing to further
increase the gap between the Italian female employment rate and that in Europe.
There is also a tangible territorial difference in female unemployment rates,
ranging from a maximum of 57% in the North East to 30.6% in the South (2009
average). Furthermore, the issue of female inactivity has worsened, now standing
at around 50%–13% more than the EU average (Istat 2010). Within the pool of
inactive female workers, the crisis has led to an increase among the number of
those most distant from the labour market, i.e. those not seeking employment and
unwilling to start doing so. What’s more, the literature highlights the connection
between the lower female labour supply, the scarce presence in our country of
sectors that tend to offer female employment, the lack of childcare services and
care for the elderly in the wake of the great inequality in the distribution of care
work within the household. (Addabbo et al. 2010; Del Boca and Vuri 2007).
The underlying element is the lack in Italy of those ways of working that make
life and work time more reconcilable (such as voluntary part-time work), given the
distribution of overall work time and the lack of childcare services and care for the
elderly. As is known, greater female employment is associated with the greater
spread of forms of contract such as part-time (Jaumotte 2003). In this sense, the
rise in the demand for part-time work, which has increased over the last decade in
Italy, may be considered an element which has contributed positively to the growth
of female employment rates. In particular, the demand for part-time work may
favour the provision of female work, in the presence of an ongoing mismatch
between unpaid household working times by gender (Addabbo 2003), loosening
the ties bound up with reconciliation difficulties that come to the fore more
strongly where the time commitments of the main family carer increase. Never-
theless, an analysis of variation rates in part-time work between 1997 and 2007
shows how in Italy the rise of involuntary part-time work is dominant, even though
1 Introduction 5
in absolute terms the share of voluntary part-time work is greater (OECD 2010).
Thus the risk remains that alongside the positive effect and the increased work
supply, there may also be an increase in labour market segregation and inferior
working conditions (Berton et al. 2009; Connolly and Gregory 2008a, b, 2009;
Manning and Petrongolo 2008; Mumford and Smith 2009). This conclusion is in a
certain sense strengthened by the fact that the lack of forms of work that encourage
reconciliation between family and paid work time, especially among those subjects
most heavily involved in care activities in certain stages of the life cycle, leads
workers to exit the potential labour force.
These are the themes that the volume will address.
1.1 Non-Standard Employment, Labour Supply

and Living Conditions
The volume picks up on the analysis of the conditions of labour supply, with
particular reference to female labour supply and non-standard employment.
The essays presented in the first part explicitly examine the factors that
determine the likelihood of female employment (Bratti and Staffolani) highlighting
the link between the phases of the life cycle in which there is the greatest con-
centration of family work (Casadio, Lo Conte and Neri) and part-time/fixed-term
employment (Addabbo and Favaro). In general (and in line with the literature), the
positive effect of institutional factors on the probability of female employment is
confirmed, including the presence of childcare services and care for the elderly,
allowing for the continuity of mothers’ working careers.
Italy is characterised by one of the lowest birth rates in the world as well as a
very low level of female employment. This defining feature of Italy is analysed by
Neri, Lo Conte and Casadio, focusing on the ‘choices’ of those who find them-
selves in the most critical phase of their life cycle with regards both to the birth of
their children and their own working careers, yet who have in fact already made a
choice with regard to the birth rate issue: new mothers. Thus this is a selected
sample (given the low birth rate and the difficulties inherent in reaching the desired
number of children) of women mindful of their own working position and par-
ticularly sensitive to the occupational instability that young people have to face in
the early years of their working lives (Addabbo 2005), instability which—as noted
above—tends to continue for a relatively long time, and even more so in the wake
of the current crisis. What are the working experiences of those who have just had
a child? And what is the role, in terms of working continuity, of work-life balance
policies? These are questions that can help to identify the policies and organisa-
tional schemes that, in the current framework of ever greater working instability
during the period in which new families could be formed, thus raising the birth rate
and narrowing the gap between the number of children desired and the actual
number of children, and allowing for family planning choices which for many are
currently out of reach. Neri, Lo Conte and Casadio use microdata from the Istat
Italian Birth Sample Survey (IBSS) on mothers 18–21 months after the birth of
their children. The comparison between the dataflow showing a trend towards
inactivity among new mothers and those taken from the overall female population
shows that new mothers are the most exposed to the risk of leaving the labour
market. It thus becomes important to analyse the factors that positively influence
the likelihood of mothers’ employment in a highly intense stage of the working life
cycle, with fixed time costs due to the presence of children. In this analysis, the
Authors deal with the issue of the non-random selection of the sample of new
mothers and, given the non-availability in the dataset used of data regarding
women without children, they make use of a broader sample extracted from the
survey commissioned by the Bank of Italy on Italian families’ household income
(Survey on Household Income and Wealth, SHIW) in order to carry out the test.
Likewise, using the IBSS dataset, they carry out a test on the endogeneity between
the decision to have more than one child and the mothers’ occupational choices.
The factors that influence the likelihood of employment among new mothers
are thus analysed using a bivariate probit model which estimates both the prob-
ability of new mothers’ not being in work 18–21 months after childbirth and the
probability that the child attends preschool (a variable which is not included
directly in the first model given the potential endogeneity between the occupa-
tional choices of the mother and the child’s attendance of preschool). The model
confirms the existence of a strong negative correlation between the child attending
preschool and likelihood of the mother being out of work. Furthermore, the esti-
mate in this model confirms the positive role of the educational level of the mother
as a means by which to significantly reduce the likelihood of being unemployed.
An important factor in the likelihood of being out of work is also the mother’s
previous working experience, guaranteeing a greater probability of finding
employment after childbirth. This result is in keeping both with human capital
literature and the greater fixed costs that employed women would be faced with in
the wake of a career interruption. Furthermore, the probability of occupational
continuity increases among women employed in the public sector, where there
appears to be greater work life balance.
The Authors therefore provide a second bivariate model to estimate the like-
lihood of a mother employed at the beginning of pregnancy who then left her job
of her own accord and at the time of the interview is not employed, along with the
likelihood of the child attending preschool.
Among the results of the estimates, the greatest occupational instability may be
noted among new mothers who before childbirth were employed with a fixed-term
contract, as these appear to be more exposed to the risk of being out of work in the
first model estimated, and to leave it of their own accord in the second.
To what degree might public policies and the availability of part-time work
contribute to the development of the supply of work for women? These issues are
addressed by Bratti and Staffolani, who focus on Istat LFS microdata putting
forward the results of an ‘ordered probit’ model on the likelihood of inactivity, as
well as part-time and full-time occupation. The sample includes more than 40,000
women of a working age and allows for an analysis of the impact on the likelihood
1 Introduction 7
of their being in work and the occupational structure (part-time or full-time) of the
socio-demographic structure of the family (the makeup of the nuclear family, the
number and age of the children, the occupational structure, the presence of family
members in need of care, and of inactive grandparents), of territorial variables (on
the spread of part-time work and the state of the labour market) as well as indi-
vidual characteristics (age and level of education). The great number of respon-
dents in the sample and the significance of the data source used on a regional level
also allows the Authors to include territorial variables on childcare and early care
coverage ratios in order to check for the effect of the availability of services on a
local level on female employment.
Bratti and Staffolani confirm the positive effect of the presence of childcare
services and assistance for the elderly on the female labour supply. The availability
of part-time work increases the likelihood of women with small children partici-
pating in the labour market; furthermore, once territorial indicators on the state of
the labour market and the availability of services are expressed within the model,
the dummies on areas of residence do not appear to have any significant weight on
the probability of participation. The territorial differences noted thus seem to be
more linked to the state of the labour market (in this regard, note also the presence
of a phenomenon discouraging female participation in the labour market in areas
characterised by high levels of unemployment) and the presence of personal ser-
vices clearly capable of reducing the fixed costs of entering and remaining in the
labour market by those who in Italy appear to play the role of the main carer in the
family. The presence of children under 15 or disabled people in fact greatly
reduces the likelihood of mothers’ participation, particularly when there are
children below 3 years of age—the age range in which there is the greatest lack of
childcare services in Italy, and thus the greater the fixed costs are in terms of
carer’s time. On the other hand, it is by virtue of this selfsame lack of care services
outside the family in Italy that the presence of inactive grandparents appears to
increase the likelihood of women’s participation in the labour market. It also
shows that it is more likely for better educated women to work full time.
Hence looking at part-time work as a way of working with a potentially positive
influence on female participation in a country like Italy, in which—as mentioned
above—the number of working women is particularly low and personal services
able to encourage the supply of female labour are still few and far between, and
distributed very heterogeneously across the territory, the article by Bratti and
Staffolani confirms the possibility of intervening in terms of encouraging paid
female work, particularly in phases of the family life cycle in which there are the
greatest workloads linked to the presence of young children. Thus while the spread
of part-time work potentially incentivates the supply of female labour, in the
period analysed by Bratti and Staffolani (prior to the adoption of policies aimed at
encouraging the adoption of part-time labour by companies, promoting its distri-
bution) the presence of children under 15 is not associated with a greater supply of
part-time labour on behalf of the mothers. As the Authors themselves underline,
this could be due to the insufficient capacity of companies in that period to satisfy
the requests from female workers for part-time contracts in the light of an
increased family burden. Hence while the greater presence of part-time employ-
ment in a given area of residence incentivates women’s participation (potentially
interested in exploiting this opportunity in periods of great domestic work) the
very presence of those greater domestic workloads does not significantly influence
the supply of part-time labour, thus calling for policies (which were later imple-
mented in part) aimed at promoting the use of part-time as a working formula able
to guarantee a better work-life balance.
The greater incidence on the total of workers and the major role of part-time
and fixed-term work for women lead Addabbo and Favaro to analyse the likeli-
hood of part-time and fixed-term contracts from a gender perspective. To this end,
the Authors make use of the IT SILC 2006 survey in the wider European Statistics
on Income and Living Conditions Survey micro-data to produce bivariate probit
models in which one equation estimates the probability of employment and the
other the probability of being employed on a part-time or fixed-term contract. The
multivariate analysis shows the existence of gender differences in the likelihood of
working with fixed-term contracts: among men this probability is greater the
younger they are, while the likelihood of being given a fixed-term contract
increases for women as they get older. Furthermore, a greater exposure to the risk
of working with fixed-term contracts may be noted among women with qualifi-
cations equal to or greater than the undergraduate degree. While the presence of
children under 15 does not appear to influence the likelihood of either men or
women working on fixed-term contracts, the likelihood of women working part-
time increases when there are children under 15 to look after. As well as estimating
the probability of being employed part-time or with a fixed-term contract sepa-
rately for men and women (in order to capture the different weight by gender of the
same factors), Addabbo and Favaro analyse the determinants of the probability of
being employed part-time against the worker’s will. On average, the likelihood of
being employed part-time involuntarily is greater among women; however, where
there are children under 15, the likelihood of being unemployed involuntarily
diminishes significantly and, vice versa, the likelihood of voluntary part-time
employment increases. This result therefore shows a step forward in 2006 com-
pared to the situation found by Bratti and Staffolani with reference to a previous
period in the possibility that part-time work is a form of contract chosen to better
address a greater domestic workload.
However, while on one hand the greater likelihood of voluntarily opting for
part-time work when there are young children—an option which, on the basis of
the data analysed by Addabbo and Favaro, appears to be found more widely in the
north of the country—it may be considered a positive sign with regard to female
participation in the labour market and the possibility to reconcile paid work and
family life; on the other hand, their greater presence in non-standard employment
may entail costs that Addabbo and Favaro set out to quantify. The Authors
underline the presence of specific costs linked to wage differentials, the lesser
likelihood of accessing managerial positions and the lesser use of health services,
showing in particular that passing up on health care treatment out of the lack of
resources increases significantly among those working on fixed-term contracts.
1 Introduction 9
1.2 Non-Standard Employment, Workers’ Mobility

and Labour Market Structure
The articles in the second part of the volume examine the spread of non-standard
work in Italy in greater detail, as well as the reasons behind it from a dynamic
perspective, analysing the incoming and outgoing flows from non-standard
employment.
As already seen in the past, the spread of non-standard work is associated with
the legislative changes that took on particular consistence over the course of the
1990s (cf. Sestito 2002, pp. 65–75). In the new regulatory framework—which in
some aspects have undergone changes of a structural nature (such as the
strengthening of the productive/manufacturing sectors etc. in which training on the
workplace is not so relevant)—companies use the normative tools that the change
in legislation has made available in order to cut costs and transform the quasi-fixed
costs of labour into variable costs (simultaneously cutting costs on redundancy
contributions, direct remuneration and social contributions).
The first issue concerning the spread of the various forms of non-standard
employment is how it is to be measured and the identification of the conditions of
supply and demand. The essay by Barbieri and Sestito paints an overall picture of
temporary employment in Italy through an estimate of the size of the phenomenon,
an analysis of its composition (in relation to the characteristics of workers and
jobs), offering a number of indications, which may be deduced from the official
statistics, on the voluntary/involuntary nature of labour conditions. Estimating the
dimensions of the phenomenon is not something that may be taken for granted.
The Authors underline that there are size issues. By examining the data provided
by administrative sources (Inps—the National Institute for Social Security—and
the Ministry of Labour) and the Istat LFS data, 2004, it becomes clear (as also
acknowledged in the following article by Tattara and Valentini) that the Istat LFS
data underestimate (especially until 2004) the entity of temporary labour. Using
the series compatible with the new edition of the Istat LFS data (used since 2004),
they trace the rise of temporary labour over the last 15 years. It may be seen how
the growth trend of temporary labour has come to the fore most constantly right
from the early 1990s, with a particularly sharp acceleration over the last 2 years.
Using this source, the stock indicators show that temporary labour in Italy con-
cerns over 13% of workers. At the start of the 1990s, the percentage of temporary
workers was roughly half. In terms of flow (annual recruitments in relationship to
the overall total of workers), over this period, values slightly short of 40% are
reached. Thus this is a phenomenon of great note as well as one which has shown
no sign of slowing down over recent years, except the lesser incidence incurred by
the shift towards inactivity or unemployment in the wake of the crisis (Istat 2010).
The constant rise in the use of fixed-term contracts seems to suggest the pre-
domination of factors of a structural nature.
A further element highlighted in this article concerns the rise in the number of
workers who state that they have accepted a temporary job out of lack of
alternatives; i.e. the rise in the number of ‘involuntary’ temporary workers. The
data available for 2006 indicate that more than 80% of temporary workers are
‘involuntary’.
Analysing the make-up of temporary labour through the estimate of a probit
model based on Istat LFS data for 2004 and 2006, the Authors show that tem-
porary labour is the most commonplace among the weaker social groups, in the
sectors and professions in which labour is least qualified. Compared to other
groups of workers, temporary labour is found most commonly among women,
students and young people first entering the labour market, as well as workers with
the lowest levels of education and qualifications. Furthermore, the likelihood of
having a temporary job is greater in the South of Italy and, in general, in the Italian
provinces in which unemployment rates are higher.
Given the absence of information on wages and the satisfaction levels of
workers in the Istat LFS, as regards the aim of analysing the quality of labour in
temporary working positions, the Authors choose three factors as indicators of the
quality of labour: its involuntary nature, the worker seeking a different job, and
training activities. In the latter two indicators, the Authors carry out a comparison
between workers with fixed-term contracts and those with permanent contracts.
As far as the involuntary nature of labour is concerned—an indicator of which
the ambiguous elements are discussed by the Authors at length—the most inter-
esting result we believe lies in their claim that while greater levels of involun-
tariness are to be found in the South, the local labour markets in which there is the
greatest use of temporary labour are not necessarily those in which the highest
levels of involuntariness are to be found. Levels of temporary labour and those of
workers’ involuntary acceptance of it, in other words, are not correlated variables
in terms of level nor in terms of time variations.
What’s more, even though a contraction may be noted in the most recent part of
the survey, job-hunting activities are undertaken more frequently by workers with
fixed-term contracts than workers with permanent jobs: a datum which may reflect
lesser job satisfaction, or which may be determined by the search for possible
occupational alternatives once the current contract expires (and therefore, in some
way, indicate a subjective perception of precariousness of one’s own working
status).
Many issues remain open, in fact as stressed at the beginning one of the main
ones is whether (and to what extent) temporary labour constitutes a bridge towards
stable employment. The three other articles that complete this part of the volume
set out to illustrate this concept, from various different points of view and with a
range of different analytical tools.
The article by Picchio deals with this aspect of the analysis stressing the
behaviour of companies. While, indeed, companies make use of temporary con-
tracts exclusively as a means by which to limit labour costs and adapt to variations
in product demand, temporary labour may become a segregated employment area
which by no means favours the transition towards permanent employment. Vice
versa, while work experience makes it possible to acquire some form of capacity
and competence, temporary labour makes it possible to prevent the deterioration of
1 Introduction 11
human capital and can provide a signal which facilitates access to permanent posts.
In this sense, the underlying hypothesis from which the Author sets out is com-
plementary to the notion of temporary labour as a means of selecting the workers
best suited to the company, as previously proposed in the volume by Barbieri and
Sestito.
The analysis focuses on the comparison between the probability of transition
respectively from unemployment and temporary labour to fixed work with a
permanent contract. To this end, three editions are used (2000, 2002 and 2004) of
the Survey of Italian Households’ Income and Wealth (SHIW), carried out on a
representative sample by the Bank of Italy every 2 years since 1989. The basis of
the data makes it possible to construct a balanced panel made up of around 1,700
individuals aged between 15 and 64 in the first survey, and present in all three
editions.
On the basis of these data, dynamic probit models are created, the solidity of
which is carefully tested. The results suggest that, given the observable and non-
observable characteristics of the worker, temporary contracts ease the transition
towards permanent employment. Being employed with a temporary contract rather
than unemployed in fact leads to an increase in the likelihood of being employed
with a permanent contract by 13.5–16% points. The likelihood is lower among
women and among workers in the South, and increases (not in a linear fashion) in
relationship to education, work experience and family responsibilities. In this
sense, the Author concludes that temporary labour facilitates the abandoning of the
job-seeking circuit in favour of permanent employment.
The essay by Origo and Samek Lodovici addresses the same theme on a sub-
group of temporary workers. It in fact examines the probability of transition to
stable employment among those employed with a temporary help contract, a tool
introduced to Italian legislation in 1997 which since then, has been used
increasingly by firms. It is estimated that there are now around 300,000 workers
employed using this kind of contract.
The essay explores a database especially put together on the basis of a sample
survey, representative on a national level, referring to around 1,800 individuals
with at least one temporary work experience between April 2003 and October
2004. The dataset contains detailed information on the characteristics of the
workers and firms, and provides an adequate response to the issues linked to
sample distortion.
In the empirical analysis, using competing risk duration models which make it
possible to bear in mind dependency on state, the probability of transition from
temporary help work to other states in the labour market (occupation with fixed-
term contracts, other forms of temporary work, job-seeking, or returning to the
education system) is calculated.
The results are only partially similar to those set forth by Picchio. Temporary
help work is not itself a ‘‘trap’’, but whether or not there is a ‘‘stepping-stone’’ type
effect, facilitating access to stable employment, depends on the characteristics of
the worker, of the companies and the position occupied. In particular, the indi-
vidual characteristics (gender, level of education, family background and makeup
of the family) explain an important part of the transition towards unemployment

and the (re-)entering of the education system, yet they have a less relevant effect
with regard to the transition towards stable employment. The probability of
accessing stable employment depends more on the conditions of the labour market,
the characteristics of the company and the role held, with a lesser likelihood of
stabilisation in the presence of unfavourable conditions. In this regard, we may
consider the case of the public sector in which, in the period under study, the
adoption of restrictive budget policies did not allow for new recruitment, and thus
temporary labour did not in fact appear to promote stabilisation.
Furthermore, for the group of temporary workers, previous work experience
gains relevance. Access to stable employment is more common among (manual)
jobs where there is previous experience of permanent employment (and temporary
employment agencies appear to play a positive role here), while this is rather less
the case for those jobs with a fragmented working career, characterised by a long
series of temporary occupations and changes of workplace.
Lastly, in determining the transition towards different states, the reasons why
individuals and companies adopt these forms of contract are also important. The
results of these forms of contract, in terms of status on the labour market, thus
appear to be more heterogeneous than those put forward in the previous articles.
The spread of temporary labour also has relevant consequences in terms of
inequality and the segmentation of the labour market. Tattara and Valentini con-
sider this theme. Their article draws on individual data from administrative sources
(Inps) on wages and working careers with reference to the entire population of
those working in manufacturing in two Venetian provinces (Vicenza and Treviso)
throughout the 1975–1997 period.
The dataset used allows for an accurate reconstruction of the working history, the
succession and duration of the single workers and the wages received for each job. At
this point, the Authors identify two categories: those who sooner or later will be given
stable employment, greater protection and relatively high salaries (stayers) and those
who, in the light of both their own individual characteristics and those of their job,
have relatively low wages and appear to be trapped in a job which does not allow
them any room for career development in the proper sense (movers). This component
of workers who move in and out of the labour force, who frequently change occu-
pation without ever stabilising their working position, characterised by a notably
higher level of women and workers with a low level of formal education/qualifica-
tions grows to a large extent over the course of the period examined. The share of the
movers, of the workers with chaotic career patterns or without any career perspec-
tives, appears to grow from around 15–16% at the start of the 1980s to a little under
25% in the 1990s, with an even greater percentage of such workers employed in small
and micro-sized companies (those under 50 employees).
The result is important. By using a database limited to a specific area, yet solid
and highly informative with regard to working careers, the article shows that
temporary employment in general terms (regardless of the specific contractual
forms that it might take on) is not confined to the period of entering the labour
market. For a significant and growing share of employed workers, this may be
1 Introduction 13
looked upon as a permanent condition. In other words, Tattara and Valentini’s

essay shows it is still possible in some ways for fixed-term contracts (at least for
some elements of employment and to some degree) to facilitate the transition
towards permanent contracts, but for many they do not give rise to working
relationships with any significant continuity over time. And since the movers have
an income profile significantly lower than that of the stayers, the long-term con-
sequences are extremely important to consider.
1.3 Part-Time Employment, Working Conditions

and Job Attributes
As mentioned above, together with the rise in temporary labour in Italy, over the
last decade we have witnessed a rapid spread of part-time employment. This is a
complex phenomenon, involving somewhat diverse aspects such as the evolution
of the family, attitudes to work, the evolution of company organisational models,
with notable effects in terms of occupation, the structuring of the labour market
and, more in general, of social organisation. There are companies which, on the
basis of the type of product or service that they offer or by virtue of their internal
organisational structure, discourage the use of part-time employment. On the
contrary, there are also companies for which part-time employment provides
organisational flexibility, increases in productivity, as well as the possibility of
guaranteeing a continuous service at acceptable costs, while adequately dealing
with peaks in demand. Also the range of part-time workers is extremely diverse.
As shown previously, the use of part-time employment takes place in different
ways between men and women. Among males, it is a phenomenon found largely in
the phases of entering and exiting the labour market. If part-time work is examined
only from the point of view of the life cycle, among women there are markedly
different paths to be followed, also with regard to the willingness with which part-
time work is accepted. Part-time employment may also be used by young people
during the familiarisation phase of work, for whom part-time work constitutes one
of the tools in the search and evaluation of various kinds of employment, or a tool
with which to reconcile work and other learning activities. Similarly, there are
components that by this means choose to occupy a borderline space between
participation and non-participation in work, workers in search of a different job or
elderly workers in the process of exiting the labour market.
Thus it comes as no surprise that the evaluation of these forms of contract and
their effects is controversial, and part-time is looked upon sometimes as a tool with
largely positive connotations, making it possible at the same time to satisfy
companies’ needs for flexibility and workers’ choices on time use, increasing
levels of occupation. At other times, on the other hand, the negative aspects are
emphasised, in terms of the role and duties of part-time workers within the
company, their training and career opportunities, terms of pay, working commitment,
involvement in organisational choices, sharing of company goals etc.
In the third part of the volume, three essays are featured looking at part-time
mainly from the point of view of working conditions, the wellbeing of workers
with part-time contracts, their perception of the part-time relationship and their
degree of satisfaction.
The article by Burchell outlines the development of part-time employment in
Italy in relation to the trends to be found in the main European countries, drawing
on a number of sources including the European Working Conditions Survey
(2002). It is argued that part-time employment in the main European countries is
not a synonym of fixed-term, non-standard employment, nor does it coincide with
low company seniority and working instability. Furthermore, it is not necessarily a
second best for those who cannot find standard employment (and that on the
contrary, involuntary part-time is less common in those very countries in which
part-time as a whole is most widespread). The ‘partimers’ (and women in par-
ticular) are no less satisfied with their work than their full-time colleagues, most of
all by virtue of the greater compatibility between work time and other activities. In
this sense, it is not uncommon for part-time work to be preferred to full-time
employment.
Depedri’s essay reaches very similar conclusions in many respects. In this work
the motivations, involvement and satisfaction with work as perceived by part-time
workers are compared to full-time workers in the same companies. The data are
taken from a study carried out on a set of around 2,000 workers occupied in the
sector of social services both in profit-making and not-for-profit companies, many
of which were small-sized. The choice of the sector is important. In personal care
services activities in fact, a broad use of part-time contracts goes hand in hand with
a clear feminisation of employment as well as the use of workers with a high level
of education. Furthermore, given their relational character, even more than in other
activities, motivation and commitment are key aspects of the quality of service
offered.
Adopting reasonable control indicators on the characteristics of the worker and
the job, the essay highlights that in this sector, part-time workers enjoy a degree of
job satisfaction entirely comparable with that of full-time workers. There are no
major differences in (hourly) pay, in training opportunities, in the level of infor-
mation and involvement received on the organisational and managerial choices of
the company, nor in terms of career openings. This is the source of motivations,
commitment and bonds no weaker than those of full-time workers. In Italy the
social services sector as a whole (thus including both non-profit and for-profit
companies) provides a good example of how part-time employment contracts may
allow company needs for flexibility to coexist with the needs for greater time to
dedicate to workers’ other activities. In this sense, the key message that comes
across in this essay is that part-time work does not always imply partial satisfaction
and/or a lower quality of work.
That outlined is an interpretation which has major implications on the struc-
turing of the normative framework and labour policy. Nevertheless, a number of
notes of caution are necessary. The first is that there are potential long-term trade-
offs that should be born in mind with particular reference to Italy. Part-time
1 Introduction 15
employment may have been (and may still be) a means by which to make jobs
available that otherwise would not have been so, as well as to attract groups
otherwise confined to non-participation to take part in the labour market, yet the
largely female connotation of the phenomenon risks increasing gender segregation.
The second—and once more it is Burchell that reminds us—concerns the link
between work and welfare: for many women, spending most of their working
careers as partimers means receiving a low pension and increasing their risk of
poverty. The third is that Depedri’s results are probably not generalisable to other
economies: Burchell underlines how profound the differences are on the nature
(and the extension) of part-time work only within the EU15. And neither are they
applicable to the whole of the Italian economy. In various sectors (in which for
example motivation and interpersonal relational skills are less relevant, and the use
of highly-educated workers is less common), part-time workers tend to be con-
centrated in jobs where the tasks are less complex and demanding, with lesser
potential for learning or career development.
Russo and van Hooft give particular attention to this aspect, which already
came to the fore in the essay by Addabbo and Favaro. The Authors examine a
rather complex set of questions that reconnect the identity and image of one’s self,
address workers’ time allocation choices, their preferences with regard to char-
acteristic attributes of labour, and the behaviour of companies with regard to
workers who express a preference for working less than the standard working
hours.
In the central part of the work, the identification and evaluation of the attributes
of the work of those who opt for full-time employment and those who opt for part-
time are reconstructed on the basis of a (subjective) assessment of a sample of
1,828 individual cases, of people both in work and job-seeking. The data were
gathered in Holland, ‘‘the only part-time economy’’, as the Authors remind us, but
the results concern aspects that may be extended to those employed in other
advanced economies. Without going into detail, the most important result is that
part-timers and full-time workers are not the same: be it in the role attributed to
labour in relationship to other non-market activities, be it in considering work as a
means of individual achievement, or to reach a satisfying level of income and
social status. And nor are they the same in terms of the importance attributed to the
career. They are not even the same in terms of the characteristic attributes of work
(remuneration, benefits, security and stability, content and qualification of labour,
working hours flexibility, etc.), and there are also great differences in each of the
above-mentioned dimensions between men and women. From here, rather dif-
ferent identities emerge, constructed not in isolation, but in relation to the refer-
ence group’s system of personal and social relationships, and which may lead
partimers to lose interest (and invest less) in their careers.
However, the essay also proposes a different hypothesis which calls companies
into question. The underlying idea is that the lesser career opportunities may
derive not from the lack of motivation, nor—in general terms—from a lesser
commitment or lower productivity of part-time workers, but from companies’
inherent difficulties in evaluating personal performances and, above all, from the
inadequacy of company systems with regard to evaluating performance. Opting for

part-time may in fact be interpreted as a signal of lesser commitment and lead to
the company investing less in partimers, with a consequent exclusion from man-
agerial positions and the opening of a wage gap in which they stand to lose out. In
this sense, choosing to work part-time—albeit only for a fraction of one’s working
life—may have long-term consequences.
1.4 Non-Standard Employment, Quality of Work

and Firms’ Competitiveness
The spread of the various forms of non-standard employment, in an age of rapid

and deep-rooted technological and organisational change, and of a just as rapid
growth of personal and business services (many of which are entirely new) poses
two questions. The first is what the impact of non-standard employment is on the
quality of work. The second is what the long-term consequences are on firms and
their competitive capacity. A general response to these two queries is to be found
in the concluding part of the volume.
As part of the renewed attention to the themes of the quality of work and the
relationship between the quality of work and the quality of living (Drobnič et al.
2010), the contribution made by Addabbo and Solinas deals first of all with the
issue of measuring quality according to the subjective perception that each single
worker has of it. The article starts out from the definition put forward by Gallino
(1993), who identifies four dimensions of the quality of labour (ergonomic, of
complexity, of autonomy and of control), analysing it and integrating it with two
other due dimensions: the relational/social dimension of work bound up in the
need for social recognition and the dimension of compatibility between working/
living time/conditions. In the analysis of the social dimension, attention is placed
on the network of relationships that a specific job manages to activate both within
the workplace and outside. The reconciliation dimension makes it possible to
verify the compatibility of working commitment with personal and family life.
Thus in the essay, a measuring method is put forward, articulated across the six
dimensions, which groups together more than 40 elementary indicators into synthetic
indexes of various levels, exploiting fuzzy logic based on a previous model proposed
in Addabbo, Facchinetti, Mastroleo and Solinas (2007). This tool makes it possible to
clarify the interaction between the worker’s perception of the various dimensions
that make up the quality and the remunerative/contractual characteristics of the job.
Thus, Addabbo and Solinas illustrate the results of its application on a sample
of 719 workers employed in companies in the metalwork, building, services, food,
IT and textiles sectors in the province of Modena, drawing the data from a broader-
based study. By applying a statistical and econometric analysis to the output
synthesis indicators of the fuzzy model, it may be seen how the various dimensions
of the quality of work interact as well as how the different dimensions of quality of
work differ on the basis of contract type.
1 Introduction 17
This approach makes it possible to identify low-quality labour and, with ref-
erence to non-standard work models, it shows how (in line with the literature and
with the territorial context under analysis) only among those women who willingly
work part-time does there seem to be any compensation between the reconciliation
dimension and the economic one. In fact, women who happily work part-time
show levels higher than the indicator measuring reconciliation between living and
working hours, as well as lower values with regard to those indicators measuring
the economic dimension (career, remuneration, protection and job security).
With reference to the part-time or full-time forms of contract, the results of
Addabbo and Solinas’ analysis show that more than the form of contract, it is its
voluntary nature that determines higher levels of quality of work. While on one
hand this result shows the importance of measuring the degree to which such a
choice is taken freely in the studies on the quality of work, on the other hand, in
correspondence with the increasing involuntary component in the rise of part-time
work in Italy (OECD 2010), they focus on the effect of this increase on the quality
of work itself. The greatest costs in terms of lower quality of work must also be
measured against the different exposition of various groups of the population
(women in particular, and those with a low level of education, resident in the South
of Italy) to the likelihood of working part-time against their will, as outlined on
various occasions over the previous pages. The evidence gathered does not show
the existence of compensational differentials, but rather seems to indicate the
presence of labour market segmentation between standard and non-standard
positions, between work-based and qualification-based positions.
The second issue—the impact of non-standard work on company perfor-
mance—is dealt with in Lucidi’s essay. In recent years in Italy, there has been
much debate on the slowing of productivity growth witnessed in the 1990s and
even more sharply in the first decade of the new century. Most observers agree on
a diagnosis of a structural type which first and foremost questions the structure and
specialisation model of the Italian industrial sector.
In this debate Lucidi’s essay introduces a new element: the relationship
between the flexibilisation of the labour market (in terms of the process of
determining wages and external flexibility) and its effects on productivity and, in
particular, on the productivity of labour. This is a new element not only insofar as
it is relatively unexplored, but also due to the survey perspective that the Author
proposes, turning the traditional point of view on its head, according to which the
rigidity of the labour market has negative effects on the productivity of labour
(with an unfavourable effect on individual motivation and on allocative pro-
cesses—from the companies and sectors in decline to those sectors enjoying
growth). The hypothesis put forward is, on the contrary, that in a context of wage
moderation, in the wake of the agreements of 1992 and 1993, the growing use of
fixed-term contracts (and the ensuing rise in external flexibility) may be one of the
factors that has led to determine the poor performance, in terms of production
growth, of Italian manufacturing firms. The underlying idea is that a low wage
pattern, coupled with the rise in external flexibility, may have a negative effect on
the static and dynamic efficiency of the company in various ways: reducing the
incentive to adopt new labour-saving technologies as well as the incentive (also

among workers themselves) to invest in both general and specific human capital,
mining the bases on which to build cooperative working relationships with indi-
vidual employees, and lastly, leading to negative effects on aggregate demand.
This idea is subjected to empirical verification by estimating the OLS equations
on the growth of work productivity on a representative sample of over 3,000
manufacturing companies with over 10 employees, put together on the basis of
microdata from the ‘‘Survey of Manufacturing Firms’’ carried out by Capitalia
between 2001 and 2003, as well as from budget data supplied by the AIDA
database (Bureau Van Dijk) containing specific information on the added value
and the cost of labour.
The model of reference for the estimation of the equations on the dynamics of
productivity is that put forward in a range of different works by Sylos-Labini,
integrated and modified as necessary with the aim of incorporating indicators of
external mobility and to adapt it to the use of microdata. As is known, and as the
Author underlines, the Sylos-Labini model links the growth of productivity to
three components: the level of wages compared to the cost of investment goods as
an element that leads firms to maintain (or eliminate) low productivity jobs and
processes; investment spending, aimed at measuring the impact of the new tech-
nologies incorporated in newly purchased capital goods; and, lastly, the growth of
aggregate market demand. Along with the regressors designed to measure these
effects, there are also two indicators of external mobility (the share of employees
in the firm with fixed-term contracts and the annual turnover rate of company
employees).
Details on the construction of the model, its various specifications and the
results obtained may be found in Lucidi’s essay, though we may stress that all
three of the components indentified by Sylos-Labini play the role predicted in
determining the productivity of labour (even though the brief time span considered
does not make it possible to distinguish between the existence of growing yields
set off by the expansion of the markets due to factors that may simply be traced
back to a greater use of the productive capacity). Rather more important, with
regard to the theme discussed in this volume, is that the results convincingly testify
there to be a trade-off between external flexibility and the growth of labour pro-
ductivity. In particular, over the 3 years examined, the companies with a higher
share of temporary workers and with a higher level of staff turnover show a lower
growth rate in terms of added value per employee. This result holds true partic-
ularly for the most traditional firms and those which have no formalised R&D
activities.
The results are particularly relevant both in terms of labour policies and, in even
more general terms, with regard to the reflection on the dynamics of productivity
in Italy. On one hand, the long-excised theme of the role of aggregate demand
rears its head, while on the other hand, it appears clear that the orientation towards
wage moderation and the joint flexibilisation of the labour market in the long term
poses issues of sustainability and the risk of tying down the economy to a spiral of
low growth.
1 Introduction 19
1.5 A Provisional Conclusion
Currently, it is unclear what the crisis exit strategies are. The recovery of the world
economy follows an uneven path, just as monetary, taxation and management
policies implemented by the various economies are uneven and uncoordinated.
It appears evident that this is not a part of a cycle as seen before. The financial
crisis comes to the fore against an international backdrop of profound and rapid
change in world economic balances. Suffice to mention one single datum:
according to the estimates of the International Monetary Fund (World Economic
Outlook Databases), the share of the countries in the Eurozone on the world GDP,
which in 2000 stood at 18% in terms of purchasing power, will fall to 13% by
2015. Over the same period, the share of the emerging Asian countries will double
(from 15 to 29%), not so much due to population growth, but rather because of the
product rise per inhabitant (worth only 8% in 2000 and estimated around 20% in
2015, compared to the Eurozone). In the middle of the last century, USA, Canada
and Europe accounted for more than two thirds of the world GDP; today this figure
is no more than 40–45%.
The Italian economy is profoundly affected by these processes. As known, Italy
has for many years shown an incapacity to grow at a sustained rate. Over the next
2 years, the increase in GDP will stand at around 1%. The growth of product per
inhabitant has been falling for three decades, but this process has undergone a clear
acceleration over the last few years.
Over the last decade we have witnessed a clear loss of competitiveness com-
pared to the main European economies, mainly induced by the changing dynamics
of work productivity: suffice to say that with real wages more or less stable
(+ 3%), between 1998 and 2008, in the private sector, productivity increased by
18% in France, 22% in Germany and only by 3% in Italy.
This is not the right place to examine the structural problems of the Italian
economy which have led to this trend. The factors cited in the vast literature are
manifold and lay the blame with the productive structure itself, as well as the
specialisation model in the manufacturing industry, the lack of liberalisation in the
services sector, an inadequate infrastructure and shortcomings in secondary and
tertiary training systems, and much more besides, underlining the negative impact
on the adoption of new technologies and on the performance of the manufacturing
sector as a whole.
Of all these factors, this volume takes one in particular into consideration: in the
end the common thread that ties together the various contributions concerns the
dualism of the labour market, read in the light of the spread of the non-standard
labour model.
The measures adopted since the mid-1990s, encouraging the use of fixed-term
contracts and part-time employment, as mentioned earlier, led to a significant rise
in employment rates. Part-time employment derives from the motivations both of
companies and workers in certain conditions. When part-time work is chosen on a
voluntary basis, it may satisfy the needs of both parties. The same may not be said
for temporary work: in certain conditions temporary labour may be transformed

into a factor hindering development. In different ways and from different per-
spectives, the collection of essays included in this volume show that it is time to
change tack. Without a perspective of the gradual stabilisation of precarious
working relationships, the accumulation of human capital is compromised, par-
ticularly specific human capital, with effects of marginalisation and the exclusion
of entire generations of young people, and just as serious knock-on effects on the
productivity and profitability of firms. In the final analysis, on the very potential for
the development of the economy as a whole.
Reducing this dualism and the long-term effects of temporary labour on the
working and living conditions of women and young people, insofar as they are
more likely to be excluded from the current system of social safety nets because
they are more likely to be affected by non-standard working conditions or spells of
inactivity, means taking action in a number of directions. The entire system of
social safety nets must be reformed. Along with the United States, among the
developed nations Italy is the one that allocates the fewest resources to those who
lose their jobs (OECD 2010). It is a question of creating forms of protection that
also cover fixed-term workers, who in Italy today are all but excluded.
In order to reduce the two-tier system of the Italian labour market, norms may
also be introduced to make the use of fixed-term labour more costly, to set a
maximum time scale for their adoption, and as regards remuneration, to introduce
minimum pay levels. Among others, the proposal for a single permanent work
contract including guarantees and progressive protection as company seniority
increases, moves in this direction (Boeri and Garibaldi 2008). Work placement
contracts should be completely rethought. Whatever the specific normative
framework, the underlying problem remains that of making a clear distinction
between the use of temporary employment contracts as a means of entering the
labour market and the use of fixed-term and seasonal contracts as genuinely
temporary employment.
Finding a balancing point that guarantees companies a certain degree of flex-
ibility during the hiring process, and that provides non-standard workers with a
way out of the two-fold trap of a high level of precariousness and a high level of
unemployment, and that allows those already employed to maintain reasonable
labour standards will not be easy. And not only in Italy.
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Laterza.
Part I
Non-Standard Employment, Labour
Supply and Living Conditions
Chapter 2
A Microeconometric Analysis of Female
Labour Force Participation in Italy
Massimiliano Bratti and Stefano Staffolani
2.1 Introduction
In March 2000 the European Council set out an ambitious target for female
employment rates in Lisbon, which should reach the level of 60% by 2010.
However, Italy is very far from reaching this target. Indeed, according to the
Italian National Statistical Institute (Istat) 2003 official data, only 42% of women
aged 14–64 were in employment and less than one in two participated in the labour
force.
One of the possible reasons for the low female labour force participation (LFP)
is the incompatibility between work in the marketplace and childrearing, which in
Italy could be exacerbated by the relatively low availability of public child-care
services and part-time (PT hereafter) employment opportunities (Del Boca 2002).
Hence, determining the factors associated with a high female labour force
attachment appears to be a strong priority in order to implement policies aimed at
increasing Italian women’s LFP and employment.
An early version of this chapter was presented at the 2004 Annual Conference of the
Associazione Italiana Economisti del Lavoro (Aiel). We wish to thank the Aiel Conference
participants and Paolo Sestito for useful comments. Funding from the Italian Ministry of
Welfare and Social Policies is gratefully acknowledged. The usual disclaimer applies.
M. Bratti (&)
Dipartimento di Scienze Economiche Aziendali e Statistiche, Università degli Studi di
Milano, Via Conservatorio 7, 20122 Milan, Italy
e-mail: massimiliano.bratti@unimi.it
S. Staffolani (&)
Department of Economics, Marche Polytechnic University, piazza Martelli 8,
60100 Ancona, Italy
e-mail: s.staffolani@univpm.it

Springer-Verlag Berlin Heidelberg 2012
26 M. Bratti and S. Staffolani
In this chapter we use microlevel individual data for Italy from the Quarterly
Labour Force Survey (Rilevazione Trimestrale delle Forze di Lavoro, LFS here-
after) to undertake a microeconometric analysis of the factors affecting women’s
LFP. We will give a particular emphasis on the factors that can be affected by
public policies such as availability of public child-care and elderly-care services,
local availability of PT jobs or the role of female education. The main research
questions that we will attempt to answer are: (1) Does the availability of child care
and elderly care raise female LFP? (2) Does PT employment represent a way for
women to reconcile home and market work? (3) Do women with larger families
prefer PT work?
The structure of the chapter is as follows. Section 2.2 reports a brief survey of
the empirical literature on female LFP in Italy and Sect. 2.3 deals with the
description of our estimation sample. Section 2.4 describes the econometric model
and Sect. 2.5 our main results. Section 2.6 concludes.
2.2 A Brief Overview of the Empirical Literature

on Female Labour Force Participation in Italy
A detailed survey of the empirical work that has analysed female LFP in Italy is
beyond the scope of the present chapter.1 Hence, in this paragraph we simply
report some of the main findings of this literature that will help us in the speci-
fication of our empirical model. According to the neoclassical model of labour
supply, a primary factor affecting female LFP is female wage. Several studies have
included wages in women’s LFP equations. Some examples include Colombino
and Del Boca (1990), Colombino and Di Tommaso (1996), Aaberge et al. (1998),
Aaberge et al. (1999, 2000) and Di Tommaso (1999) all of whom estimate sig-
nificant positive effects of female wages on participation. By contrast, the esti-
mated effect of the partner’s wage or income on women’s participation is usually
negative, showing the existence of a negative non-labour income effect on par-
ticipation (Colombino and Del Boca 1990; Colombino and Di Tommaso 1996;
Aaberge et al. 1999; Di Tommaso 1999). A factor positively associated with
female LFP is women’s education. Studies that have empirically found such an
effect include Del Boca (1993), Tanda (1994), Colombino and Di Tommaso
(1996), Di Tommaso (1999), Addabbo (1999), Chiuri (2000), Del Boca (2002) and
Bratti (2003b). The effect of education might reflect both pecuniary factors, such
as higher wages and a higher flow of future expected incomes, and non-pecuniary
factors such as cultural influences. Some studies have investigated the presence of
an added worker effect or a discouraged worker effect. In the first case women with
unemployed partners should be more likely to participate to contribute to family
finances, while in the second case women with unemployed partners should be
1
For a detailed survey see Bratti (2003a).
2 A Microeconometric Analysis of Female Labour Force Participation in Italy 27
discouraged from participating in the labour force, since they believe they will be
very unlikely to find a job. There is some evidence supporting the prevalence of an
added worker effect in Italy. Indeed, findings in this direction are offered by
Borzaga and Contrini (1999), Prieto-Rodríguez and Rodríguez-Gutiérrez (2003).
The role of institutional factors is investigated among others by Del Boca (2002)
who finds positive effects of the availability of public child care and PT
employment opportunities on the probability of participation. Marenzi and Pagani
(2005) focus instead on the role that elder relatives have in women’s LFP. They
find that women who can rely on informal child care by elder relatives are more
likely to participate while those who have to take care of elder relatives have a
lower probability of participation. Moreover, they consistently observe a positive
effect of both the number of places in public elderly-care facilities and kinder-
gartens at the regional level on female LFP. Bratti et al. (2005) study the LFP
decisions of new mothers in the first three years after child birth and find a strong
negative effect of the unavailability of child care (both formal and informal) on
participation and positive effects of job characteristics associated with stronger
levels of job protection and security, such as working in the public sector or with
permanent contracts.
2.3 Data Description
We use data from the fourth quarter of the 2002 LFS (October), carried out by the
Italian National Statistical Institute (Istat). We select women aged between 15 and
64 who declared to be heads of the household or spouses2 and obtain a sample of
41,594 observations.
As to the definition of the dependent variable in our econometric analyses, we
define non participation (NP hereafter) following Istat. We consider all women
who were employed full-time (FT hereafter) and did not declare to be searching
for a new job as participating FT whereas those who were searching preferably for
PT jobs as participating PT. Women employed PT voluntarily and involuntary
were considered as participating PT and FT, respectively. Unemployed women
were considered as participating PT if they declared to be prevalently searching for
PT employment. We excluded 301 individuals who declared searching indiffer-
ently for PT and FT jobs.
Therefore, our estimation sample consists of 19,922 women out of labour force
(48.25%), 3,751 participating women preferring PT (9.08%) and 17,620 partici-
pating women preferring FT (42.67%).
2
In a previous version of this chapter (see the 3rd chapter of our report to the Italian Ministry
of Welfare and Social Policies, downloadable at: http://www.dea.unian.it/staffolani/filespdf/
rapporto.pdf) we estimated a probit model for the probability of being ‘‘head of the household’’ or
‘‘spouse’’. Older women and women with low education showed higher probabilities to be in
those states.
Table 2.1 Means of territorial variables, by macro-areas

Child care Part-time Unemployment rate Elderly care
North 10.28 9.82 4.07 3.42
Center 10.14 8.24 6.43 1.16
South and Isles 3.55 6.94 17.42 1.08
Total 7.61 8.41 9.74 2.09
In our sample, 84.7% of women have a partner; 60.6% have compulsory

schooling or less whereas 30.9% have higher secondary schooling and 8.5% ter-
tiary education.
The average number of children is 0.82 in Northern Italy, 0.89 in the Centre,
1.33 in the South; single women have 0.5 children on average, whereas women
with a partner have 1.13 children.
In the following analyses we use territorial variables which may affect female
LFP. In particular, we consider the number of places in public kindergartens per
100 children aged 0–2 by region in 2000, which will also be referred to as the child
care coverage ratio, and the number of places in elderly-care public services per
100 seniors (aged more than 65) by region in 1999, which we will also refer to as
the elderly care coverage ratio. Both variables have been taken from Marenzi and
Pagani (2005). Other variables included in the econometric model are the per-
centage of PT employment out of total employment, as a proxy of PT work
diffusion, and the unemployment rate, both measured at the provincial level and
computed from the October 2002 LFS wave.
Table 2.1 reports average values of these variables by macro-area. A clear gap
between the South and the rest of Italy emerges, especially for child care avail-
ability and the unemployment rate. PT diffusion is more similar in the three macro-
areas. The elderly-care public service availability is very low all over Italy.
2.4 Econometric Issues
Let us assume that a woman has to decide between three possible LFP states (j):
NP (j = 0, NP), PT participation (j = 1, PT) and FT participation (j = 2, FT).3
We assume that the direct costs of choosing the state j given the characteristics of
individual i denoted with xi are c(j|xi), which are weakly convex and increasing in j.
For instance, these costs might reflect non-pecuniary costs due to the disutility
produced by working time or pecuniary costs borne to buy external child care. The
x’s being individual characteristics are the same across all alternative choices. Let
us also assume that the discounted return to choose state j is R(j|xi, ei), concave and
increasing in j, where ei is a person specific shifter of the return to state j. We
define the utility for individual i in state j, i.e. Vij, as the difference between the
3
This economic rationalisation of ordinal response models was originally introduced in
Cameron and Heckman (1998).
return and the cost of choosing state j. The optimal LFP state is determined for
each individual by solving the problem:
Max Vij ½Rðjjxi ; ei Þ cðjjxi Þ ð2:1Þ
j
where j = 1, 2, 3 and j = 3 is the state with the highest economic return (i.e. FT
participation, which does not necessarily imply that it is also the highest utility
state for individual i).
Let us assume that ei is stochastic, such that ei ? xi and:
Rðjjxi ; ei Þ ¼ RðjÞuðxi Þei ð2:2Þ
where Eðei Þ ¼ 1, ei 0, while cðjjxi Þ ¼ cðjÞ, i.e. participation costs do not depend
on individual characteristics.4
If s is the optimal LFP state for individual i then:
cðsÞ cðs 1Þ cðs þ 1Þ cðsÞ
ei ð2:3Þ
½RðsÞ Rðs 1Þuðxi Þ ½Rðs þ 1Þ RðsÞuðxi Þ
ei is therefore bounded by the ratios of marginal return to the marginal cost of the
cðjÞcðj1Þ
different states. If ei is continuously distributed and defining: exp½lðjÞ ¼ RðjÞRðj1Þ ,
then
h i
Prðj ¼ sjX ¼ xi Þ ¼ Pr expðlðsÞuðxi Þ1 ei expðlðs þ 1Þuðxi Þ1 : ð2:4Þ
If we further assume that /ðxi Þ ¼ expðx0i bÞ and that ei is log-normally distrib-

uted, the expression above takes the more familiar form of the standard ordered
probit model:

Prðj ¼ sjX ¼ xi Þ ¼ Pr lðsÞ x0i b ui lðs þ 1Þ x0i b
ð2:5Þ
¼ U½lðs þ 1Þ x0i b U lðsÞ x0i b
where ui ¼ lnðei Þ and Uð:Þ is the standard normal distribution function. Eq. 2.5
gives the probability of choosing intermediate states, i.e. in our case j = s = 1
(PT). While for the two extreme states, NP and FT, the probabilities are given by:

Prðj ¼ 1jX ¼ xi Þ ¼ Pr ui lð1Þ x0i b ¼ U lð1Þ x0i b ð2:6Þ

Prðj ¼ 3jX ¼ xi Þ ¼ Pr ui lð2Þ x0i b ¼ 1 U lð2Þ x0i b ð2:7Þ
respectively.
4
The specification can be adjusted so as to allow for both the return and costs of labour force
participation to depend on individual and family characteristics (see, for instance, Lauer 2003 in
the context of educational choices). However, this has no empirical relevance, since only the
effect of the covariates on the ratio of the marginal return to the marginal cost of the LFP states,
and not on the single components (return and cost), can be identified.
The vector b and the two thresholds l(1) and l(2) are estimated using maximum
likelihood. In this framework individual and household attributes increase or
decrease the return to participation and therefore affect the probability of choosing
the different states.
In the specification of the econometric model we use the ‘‘standard approach’’
(see Browning 1992; Nakamura and Nakamura 1992), i.e. we include ‘‘child
services’’ variables, such as the number and age of children, on the right-hand-side
(RHS) of the female LFP equation. Although these variables are pre-determined
with respect to LFP, they might be endogenous, i.e. they might be choice variables
for an individual, and potentially jointly determined with female LFP.5 Unfortu-
nately, the LFS does not contain retrospective data that could be useful to tackle
the endogeneity problem and for this reason our estimates are likely to be affected
by some endogeneity bias. However, we argue that the endogeneity problems are
unlikely to affect all the RHS variables in the same way. For instance, educational
choices are made much earlier than marital and fertility choices in Italy (where
women generally get married and give birth after leaving FT education), and in
this respect we could consider them predetermined and sufficiently exogenous with
respect to future fertility and LFP decisions. Evidence in this direction is provided
for instance by Bratti (2003b) who finds using data from the Bank of Italy’s Survey
of Household Income and Wealth (SHIW) that the null hypothesis of weak
exogeneity of women’s education with respect to both fertility and LFP could be
rejected. Other variables that can be endogenous are the partner’s characteristics,
such as his job qualification or education, in the case of positive assortative
mating. However, also in this case partner’s characteristics are not perfectly
controllable by a woman and the estimated correlations will partly reflect ‘‘causal
effects’’. Some variables of particular interest for our analysis are those related to
child care and elderly care availability and PT employment opportunities. Also in
this case, however, there might be problems of endogeneity or reverse causality:
women with higher labour market attachment might choose to reside in places
where PT employment opportunities and child-care services are more diffused or
the latter might be more diffused because female LFP is higher. Unfortunately, as
anticipated, the LFS does not contain enough information to solve these problems.
However, although it is not possible to exclude that some individuals will choose
residence considering the opportunities of PT employment and the availability of
child-care or elderly-care services, this would produce a substantial endogeneity
bias only if these criteria are the main determinants of residential choices, which is
very unlikely to be the case in the Italian context. In particular, because of the
constraints of child-care or elderly-care services in terms of number of places (see
Del Boca 2002 and Marenzi and Pagani 2005) and the high competition in their
allocation, the decision of a household to move where public care services are
5
This is acknowledged by the so-called ‘‘purist approach’’ in which child-services variables are
jointly modelled with labour force participation. For some examples of such approach in the
Italian context see Di Tommaso (1999), Del Boca (2002) and Bratti (2003b).
more developed will be a very risky one given the very low ex-ante probability of
being assigned a place. Moreover, since we use public child care and elderly care
availability at regional level, in our case a relevant endogeneity bias would only
emerge if households prevalently choose their region of residence according to the
local availability of public care services. Last but not least, geographical mobility
is extremely low in Italy. For instance, in 1999 the percentage of the total popu-
lation who resided in a different region (NUTS, level 2) the year before was only
0.9 and 1.2% when one considers the employed population (see European Com-
mission 2002).
As to the potential endogeneity of child-services variables, this is now widely
acknowledged by labour economists. The issue is that unobserved individual
factors might affect both LFP, i.e. the outcome of interest, and the explanatory
variables (such as the number and age of progeny). Unfortunately, we do not have
suitable data to instrument child-services variables, and given the cross-sectional
nature of our data we cannot control for unobserved heterogeneity using individual
fixed or random effects. However, we will use a very intuitive way for judging
whether our estimated effects are likely to simply reflect spurious correlations or
may partly capture causal effects: the degree of similarity of the effects of the
number of children by age. If differences in the number of children simply reflect
different time-invariant women’s unobserved characteristics, such as taste for
market work, the effect of children is likely to be undifferentiated by children’s
age. On the contrary a differentiated effect by age, in particular a decreasing effect
with age, would suggest that the effect on female LFP is related to the higher time-
intensity that the care of younger children requires.
2.5 Results
In what follows, we will describe the results by considering different types of

factors affecting female LFP:
• territorial variables (Table 2.2), including macro-area dummies, local unem-
ployment rates, child care availability interacted with the number of children by
age, PT availability interacted with the number of children by age, elderly care
availability6;
• women’s personal variables (Table 2.3), including the highest educational
qualification achieved and age by classes;
• family composition (Table 2.4), including number of children by age, family
size, number of employed children living in the family, number of employed
family members older than 15, number of disabled family members, number of
inactive grandfathers and grandmothers;
6
We also estimated the model with interaction terms between elderly care availability and
presence of inactive grandparents and between inactive grandparents and young children but they
did not turn out to be statistically significant.
Table 2.2 Ordered probit estimates of female participation: territorial characteristics

Variables coeff. z-stat. Marginal effects (%)
NP PT FT
Geographic area (ref. North)
Centre 0.049 [0.85] -1.96 0.05 1.92
South and Isles 0.100 [0.68] -3.96 0.07 3.89
Unemployment rate -0.016 [1.75]* 0.62 -0.01 -0.61
Child care availability 0.038 [7.84]*** -1.52 0.03 1.49
Child care: children 0–1 -0.004 [0.54] 0.17 0.00 -0.17
Child care: children 2–3 -0.005 [0.90] 0.18 0.00 -0.18
Child care: children 4 or more -0.011 [3.79]*** 0.43 -0.01 -0.42
Part-time employment rate -0.001 [0.05] 0.02 0.00 -0.02
Part-time: children 0–1 0.041 [2.76]*** -1.62 0.03 1.59
Part-time: children 2–3 -0.001 [0.09] 0.03 0.00 -0.03
Part-time: children 4–6 -0.001 [0.25] 0.06 0.00 -0.06
Part-time: children 7–14 0.003 [0.61] -0.12 0.00 0.12
Part-time: children 15 or more 0.005 [1.11] -0.19 0.00 0.19
Elderly care availability 0.066 [2.51]*** -2.61 0.05 2.56
Note:
No. of observations = 41,293
Pseudo R2 = 0.152
Wald chi2 (66) [p-value] = 8,333.78 [0.00]
Robust z statistics in square brackets (absolute values). Standard errors are clustered by *sig-
nificant at 10%; ***significant at 1%
Table 2.3 Ordered probit estimates of female participation

NP PT FT
Women’s education
(ref. elementary or less)
Lower secondary 0.422 [15.71]*** -15.84 2.01 13.83
Vocational 0.883 [21.39]*** -33.97 2.18 31.79
Upper secondary 1.082 [23.81]*** -41.14 1.53 39.60
Tertiary 1.611 [17.63]*** -56.33 -1.60 57.93
Women’s age (ref. less than 30)
30–39 0.061 [2.03]** -2.37 -0.05 2.43
40–49 0.032 [0.72] -1.24 -0.02 1.27
50 or more -0.415 [5.20]*** 16.44 -0.73 -15.71
Women’s characteristics
Standard errors are clustered by **significant at 5%; ***significant at 1%
• partner’s characteristics (Table 2.5), including job qualification, age by classes

and education.
Although we report our estimates in different tables, all the estimated coeffi-
cients and marginal effects refer to the same ordered probit model including all the
control variables listed above for which we report some statistics in the notes in

NP PT FT
No. of children 0–1 -0.557 [4.06]*** 22.13 -0.41 -21.72
No. of children 2–3 -0.256 [2.96]*** 10.17 -0.19 -9.99
No. of children 4–6 -0.196 [3.05]*** 7.81 -0.14 -7.67
No. of children 7–14 -0.141 [4.46]*** 5.60 -0.10 -5.49
No. of children 15 or more 0.024 [0.70] -0.95 0.02 0.93
Family size -0.035 [1.62] 1.39 -0.03 -1.36
No. of employed children -0.045 [2.02]** 1.80 -0.03 -1.76
No. of employed family members ([15) 0.201 [4.51]*** -7.99 0.15 7.85
No. of invalid family members -0.192 [1.96]** 7.64 -0.34 -7.30
No. of inactive grandfathers -0.034 [0.50] 1.36 -0.03 -1.34
No. of inactive grandmothers 0.198 [3.70]*** -7.89 0.15 7.75
Family characteristics
Standard errors are clustered by **significant at 5%; ***significant at 1%
Table 2.2. Marginal effects are computed at the sample means for continuous
variables, and by calculating the difference in the probability of the three outcomes
(NP, PT, FT) with respect to the reference category when changing the other
dummies of the same group to 1 (e.g., women’s education) for categorical
variables.
With respect to the territorial variables (see Table 2.2), our results show a
positive association between public child care availability and female participation
in the labour market. A one point increase in the ratio of child care coverage is
related to a decrease of 1.52 percentage points in the non-participation probability
and to a 1.49 percentage points increase in the probability of participating full-
time. The interaction between child care availability and children by age shows
that the positive effect of child care on participation decreases when children grow
up.
The availability of elderly-care services raises the attachment of women to the
labour market: a one percentage point increase in the ratio of elderly-care coverage
is associated to a 2.56 percentage points increase in FT participation and a
decrease in the probability of NP of a similar magnitude.
A discouraged worker effect seems to emerge: local areas with higher unem-
ployment rates are characterised by a higher female non participation, although the
effect is only significant at the 10% level.
The ratio of PT employment in the local area significantly raises the FT par-
ticipation probability only for women with children aged less than 2 (+1.59 per-
centage points).
Contrary to the conventional wisdom about regional differences in female LFP
in Italy, once the above local control variables have been included, women living
in Centre, Northern and Southern Italy do not seem to behave differently in terms
of LFP.

NP PT FT
Job (ref. manager, priv. services, typical)
Single 0.634 [6.52]*** -24.36 -0.45 24.80
Manager, industry, employee 0.062 [0.69] -2.47 0.15 2.32
Manager, industry, indep. 0.038 [0.60] -1.52 0.10 1.42
Manager, priv. services, atypical 0.203 [1.29] -8.09 0.35 7.75
Manager, priv. services, indep. -0.016 [0.22] 0.62 -0.05 -0.58
Manager, publ. services, typical 0.298 [2.95]*** -11.84 0.35 11.49
Manager, publ. services, atypical -0.044 [0.18] 1.75 -0.13 -1.61
Manager, publ. services, indep. -0.092 [1.04] 3.61 -0.30 -3.32
White collar, industry, typical 0.132 [1.55] -5.25 0.28 4.97
White collar, industry, atypical -0.045 [0.45] 1.78 -0.14 -1.65
White collar, priv. services, typical 0.131 [1.33] -5.21 0.27 4.93
White collar, priv. services, atypical 0.150 [0.73] -5.96 0.30 5.66
White collar, publ. services, typical 0.237 [3.01]*** -9.43 0.36 9.07
White collar, publ. services, atypical 0.313 [2.23]** -12.40 0.34 12.06
Blue collar, industry, typical 0.097 [1.67]* -3.84 0.22 3.62
Blue collar, industry, atypical 0.228 [2.50]** -9.06 0.36 8.71
Blue collar, industry, indep. 0.360 [4.50]*** -14.24 0.29 13.94
Blue collar, priv. services, typical 0.071 [0.80] -2.84 0.17 2.67
Blue collar, priv. services, atypical 0.153 [1.01] -6.11 0.30 5.80
Blue collar, priv. services, indep. 0.432 [5.63]*** -16.99 0.18 16.81
Blue collar, publ. services, typical 0.158 [2.19]** -6.29 0.31 5.98
Blue collar, publ. services, atypical 0.345 [2.25]** -13.67 0.31 13.36
Blue collar, publ. services, indep. 0.416 [2.09]** -16.38 0.21 16.18
Self-employed, industry 0.062 [0.88] -2.45 0.15 2.30
Self-employed, priv. services 0.157 [3.98]*** -6.25 0.31 5.95
Self-employed, publ. services 0.316 [3.50]*** -12.54 0.34 12.21
Not employed 0.032 [0.46] -1.27 0.08 1.19
Age (ref. 50 or more)
\30 -0.063 [0.78] 2.52 -0.08 -2.44
30–39 0.068 [1.21] -2.70 0.04 2.66
40–49 0.018 [0.55] -0.70 0.01 0.69
Education (ref. tertiary)
Elementary or less 0.064 [1.19] -2.55 0.05 2.50
Lower secondary 0.037 [0.70] -1.49 0.03 1.46
Vocational 0.056 [1.25] -2.22 0.04 2.17
Upper secondary 0.024 [0.64] -0.94 0.02 0.92
Partner‘s characteristics
Standard errors are clustered by *significant at 10%; **significant at 5%; ***significant at 1%
The marginal effects of the territorial variables on the probability of PT par-

ticipation generally appear to be of limited size.
As expected (see Table 2.3), highly educated women tend to participate full-
time; women with university education are less likely to participate PT than all the
other categories. The marginal effects seem to be particularly high and are always
statistically significant at the 1% level. Elder women are more likely not to
participate.
Family composition has a strong impact on female LFP. The presence of
children aged less than 15 has a negative effect on both FT and PT participation,
with a stronger effect on the former. The size of the effect tends to decline with
children’s age: women with one child aged less than two have a 22.13 percentage
points lower probability of NP than women without children while the ‘‘partici-
pation penalty’’ is only 5.6 percentage points for women with children aged 7–14.
These differences in the effects of progeny by age suggest that our estimates are
likely to measure causal effects of children on female participation, as we
anticipated in Sect. 2.4, rather than simply reflect women’s unobserved hetero-
geneity in taste for children and LFP.
Both family size and the number of employed children have negative effects,
significant only at 10% level, on female LFP. Women living in families where
other family members work are more likely to participate (probably because of
family network effects).
The presence of disabled members in the family is associated with a higher non-
participation probability (+7.64 percentage points).
When inactive grandmothers live in the family, women are more likely to
participate (+7.75 percentage points FT and +0.15 percentage points PT). This
effect can be explained in terms of informal child care that elder relatives may
provide to participating women.
Single women (see Table 2.5) are more likely to participate FT (+24.80 per-
centage points) and less likely to participate PT (-0.45 percentage points) with
respect to the reference category (women with a partner working as a manager in
the private services with a ‘‘typical’’ contract, i.e., a FT permanent position).
Women with partners in the reference category are more likely not to partici-
pate with respect to all the other groups. It seems that an ‘‘income effect’’ operates:
women with a partner in a high income job are less likely to participate. The other
partner’s characteristics do not seem to matter.
2.6 Concluding Remarks
In this chapter we have analysed female LFP using Italian Quarterly LFS data. A
number of factors emerge as important determinants of female labour force
attachment.
Institutional factors such as child care and elderly care availability, which are
highly differentiated across the country, and local unemployment rates all affect
female behaviour. A higher provision of child-care and elderly-care services and a
lower unemployment rate are positively associated with female LFP. These three
variables apparently account for the generally observed lower participation rate in
central and southern Italian regions. However, given that public care services are
measured at regional level, these effects might partly capture other regional
influences. PT employment opportunities at local level appear to increase female

LFP only for women with very young children.
In view of female employment rate increasing also in Italy, our analysis sug-
gests that policy makers should improve care services, both for children and for
elderly people. For instance, if our estimates fully reflect ‘‘causal effects’’, dou-
bling the current child-care coverage ratio (in 2000, there were 7.62 public kin-
dergarten seats every 100 children aged 0–2) would imply an increase of 11.35
percentage points in the female FT participation rate and of 0.23 percentage points
in the female PT participation rate. Doing the same for the elderly-care coverage
ratio (in 1999, there were 2.09 places in public elderly-care services per 100
seniors aged more than 65), would produce an increase of 5.4 percentage points in
the female FT LFP.
The presence of children aged less than 15 negatively affects female LFP, with
a decreasing effect by children’s age. Our analysis does not support the idea that in
Italy, in the period under study, PT was a way for women to reconcile home and
market work, since the presence of young children rose women’s probability of
inactivity, while having a negligible effect on PT participation. This may also be
due to the period we have analysed (2002), since the diffusion of PT work is only a
very recent phenomenon in Italy, and, therefore, it would be very interesting to
replicate our analysis with current LFS data. The presence of inactive grand-
mothers in the family is positively correlated with participation and suggests the
importance of informal child care. Single women and highly educated women are
more likely to participate.
Because of evident discouragement effects, unemployment reduction, which is
an obvious way of increasing female employment, would also help to increase
women employment by raising female participation.
Last but not least, widening tertiary education, by increasing women’s partic-
ipation in higher education and reducing drop-out rates, will improve female
attachment to the labour force: the difference in the probability of FT participation
between women with upper secondary schooling and university education, for
instance, amounts to about 19 percentage points.
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Chapter 3
Balancing Work and Family: New
Mothers’ Employment Decisions During
Childbearing
Andrea Neri, Martina Lo Conte and Piero Casadio
3.1 Introduction
A rise in female labour-market participation and a decline in birth rates have been
observed in most European countries.1 Nevertheless, in the past decade, several
countries, notably France, Spain and Germany, have experienced a joint increase
in female participation and fertility, mainly because of national policies aimed at
balancing work and family life.
In Italy, by contrast, fertility has remained relatively stable (after a period of
significant decline) while increases in female participation rates have been modest.
Consequently, Italy today has one of the lowest fertility rates and one of the lowest
levels of female employment.
1
The views expressed in this paper are those of the authors and do not necessarily reflect those
of the Bank of Italy or of Istat. We are grateful to Renata Bottazi, Luigi Cannari, Giovanni
D’Alessio and Federico Signorini for their helpful comments. Although the paper is a collective
work, Sects. 3.1 and 3.2 are to be attributed to Piero Casadio; Sects. 3.3 and 3.7 to Martina Lo
Conte; Sects. 3.4, 3.5 and 3.6 to Andrea Neri.
A. Neri (&) P. Casadio

Economic Research Department, Bank of Italy, Via Nazionale 91,
00184 Rome, Italy
e-mail: andrea.neri@bancaditalia.it
P. Casadio (&)
e-mail: piero.casadio@bancaditalia.it
M. L. Conte (&)
Social Statistics Department, Istat, Istituto Nazionale di Statistica,
Viale Liegi 13, 00198 Rome, Italy
e-mail: loconte@istat.it

40 A. Neri et al.
Numerous explanations for this apparent anomaly have been advanced in the
literature, and they generally cite social and cultural aspects, rigidities in the labour
market, and inefficiencies in the child-care system.
This paper studies the employment decisions of Italian mothers (and their
determinants) during the childbearing period, using for the purpose the Italian
Birth Sample Survey. The hypothesis is that this period is particularly critical, and
that the difficulties faced by new mothers are among the factors that contribute to
keeping their participation rate at a low level.
The paper is organised as follows. Section 3.2 presents a brief review of the
applied literature on female employment decisions. Section 3.3 describes the 2002
Italian Birth Sample Survey (IBSS) data. Section 3.4 discusses the problem of
selection and endogeneity. Section 3.5 examines the determinants of the proba-
bility that mothers will not be in work about 18–21 months after childbirth. The
focus then shifts to working mothers, examining their voluntary decision to quit
work after delivery. Section 3.7 makes some concluding remarks.
3.2 The Main Determinants of Mothers’ Working Status
The presence of children seems broadly to influence female employment patterns

in most European countries. In 2003 the average European Union employment rate
for women aged 20–49 without children under 12 was 75.1%. This rate decreases
by about 23% points for mothers in the 2 years after childbirth. It subsequently
increases with the age of the youngest child, rising by about 8% points with each
change of age class from 0 to 2 years to 3–5, and then to 6–11 years (Eurostat
2005). The average European Union employment rate for women aged 20–49 with
the youngest child aged over 12 seems to be about 5–10% points below that for
women without children.2
In Italy, the employment pattern of mothers is quite different. The employment
rate for women aged 20–49 without children under 12 is only 60.4%. The
employment rate drops in the first 2 years after childbirth (by about 10% points),
and there is no significant recovery when the youngest child becomes more than 3
or 6 years old.
Work and fertility decisions jointly depend upon a broad set of factors, such as
individual preferences, household composition, social habits, labour-market flexi-
bility, childcare costs, and availability. We now present an overview of the main
empirical results of previous studies (for more comprehensive surveys see, among
others, Dex and Joshi 1999; Jaumotte 2003 and Boeri et al. 2005).
2
This time-pattern remains fairly similar for mothers with two children, while a third child
negatively affects the probability of re-entering the labour market. In particular, for women with
at least three children, the employment rate remains 10-20 percentage points below that for
women without children, even when the youngest child is aged over 12.
3 Balancing Work and Family 41
Social and cultural aspects—In the vast majority of countries, mothers work
longer hours than do fathers, and they cumulate paid jobs and unpaid duties.
Different social habits strongly influence the division of caring tasks between
partners, and therefore the distribution of paid working hours (Esveldt 2003;
Sleebos 2003). The main determinant of a balanced distribution of duties and work
within a couple is the woman’s human capital. A higher level of female education
is associated with greater labour-market participation and a closer attachment to
work (Gutiérrez-Domènech 2005; Jaumotte 2003). In Italy, too, the employment
rates for women with tertiary educations are in line with the European average
levels, for any number of children aged under 12 (Eurostat 2005; Table 3.2).
Labour market flexibility and regulation—The diffusion of part-time contracts
is also positively correlated with female participation (Bardasi and Gornick 2008;
OECD 2003b). However, flexible contracts may increase female segregation in
low-paid positions with reduced career opportunities and greater job insecurity,
which in turn reduces labour-market attachment among new mothers (Addabbo
2003). Long or repeated spells of non-employment are likely to diminish the
mother’s human capital and future wages (Beblo and Wolf 2002). Removing
labour-market distortions could improve social welfare and reduce wage
inequalities (Kamerman et al. 2003).
Public support for families—Female participation is also influenced by govern-
ment policies: family taxation, parental leave, childcare subsidies and child ben-
efits (Palomba 2003; OECD 2003a). In particular, the availability of public
childcare, and its flexibility in terms of hours provided per day, have a positive
effect on women’s labour supply (Jaumotte 2003; Gornick et al. 1997; Del Boca
2003). In many European countries, the support given by relatives to the house-
hold, in terms of financial transfers and time, increases the opportunities for
mothers to work and have children (Esveldt 2003). However, the presence of
elderly relatives in the household may have a double role in explaining women’s
work patterns: elderly relatives can provide household services such as childcare
and domestic help, but they may also themselves require unpaid help, thereby
discouraging the work participation of women (Marenzi and Pagani 2008).
3.3 The 2002 Italian Birth Sample Survey
Our analysis uses data from the Italian Birth Sample Survey (IBSS), which was
carried out for the first time in 2002 by the Italian National Statistics Office (Istat).3
The overall sample consisted of 50,408 births registered between the second half
of 2000 and the first half of 2001, this being around 10% of total births in that
period. Mothers were interviewed, using the CATI technique, about 18–21 months
3
The Survey’s structure and main results are described in Istat (2003, 2004, 2006a, b) and in
CNEL (2003).
42 A. Neri et al.
after delivery. The questionnaire contained questions gathering general socio-

demographic information on the new-born child, the delivery, and the parents
(‘short’ form). The results presented in the next sections are based on one-third of
the sample—16,788 mothers—interviewed with a ‘long’ form containing further
sections about mothers’ working conditions before and after childbearing, the
household composition, the formal and informal childcare networks, and the
division of household chores.
Employment before childbirth—Around 60% of the IBSS new mothers had
been in employment when they discovered that they were pregnant. This per-
centage is about 9 points higher than that for all women reported by the 2001
Labour Force Survey (LFS). In the LFS, the female employment rate was about
47% between the ages of 15 and 49, and 51% between the ages of 20 and 40.4 The
share of mothers working before childbirth was about 75% in the Northern regions
of Italy, 65% in the Centre, and 43 and 38%, respectively in the Islands and the
South. Also those percentages are much higher than the corresponding ones
resulting from the 2001 LFS. Moreover, according to IBSS survey, a larger share
of women worked in the public sector (17 vs. 14% in the 2001 LFS).5
All the above-mentioned differences suggest that a selection process is probably
at work, given the correlation between fertility decisions and the current job status
of women. Indeed, it seems likely that women with a higher degree of job
instability prefer to postpone childbearing. We sought to control for this selection
process in our estimation (see the following section).
Changes in working status—About 47% of the IBSS new mothers were
employed both before and after childbearing, thereby exhibiting a strong attach-
ment to their jobs. By contrast, 37% of new mothers remained out of the labour
force [inactive]: 16% had never worked before, while 21% had had at least one
previous work experience. The remaining 16% of new mothers changed their
working status: 4% started to work after delivery while 12% lost their jobs in the
period around childbirth.
The IBSS drop-out percentage for new mothers is far higher than that for all
women: in the period 2001–2002, according to the Labour Force Survey,6 only
about 6% of working women aged between 20 and 40 shifted to non-employment
status, while in the IBSS about 20% of mothers in employment at the beginning of
their pregnancy stopped work thereafter. In both surveys, drop-out transitions
increase for women working on temporary contracts, or with no contract, and for
part-time workers.
In general, there is a negative balance between the flows of women entering the
labour force after childbirth and those leaving it. A positive contribution is made
4
A significant difference between the two statistics remains even when the age structure used by
the IBSS is imposed on LFS the data.
5
Specifically, the share of employed mothers in the IBSS is about 6% points above the LFS
share in the Northern regions; 10 pp in the Centre and more than 12 pp in the South and Islands.
6
In the LFS, the transitions are only available at a one-year distance.
by part-time contracts: about 27% of full-time mothers shifted to part time,

boosting the share of voluntary part-time from about 6% to about 30%. A part-time
contract is probably the most attractive alternative to work exit. The reverse
transition from part-time to full-time employment after childbirth only happens in
less than 1% of cases.
Childcare—Mothers still working after childbirth are mainly able to reconcile
work and family responsibilities by relying on the help of grandparents. In 55% of
households, the elderly provide vital support in caring for children. Many families
prefer to trust their own relatives for reasons of reassurance. Moreover, the role
played by relatives is of particular importance because of its low costs associated
with high flexibility, advantages not always available from childcare services.
About 20% of mothers use childcare services (both public and private) and only
10% use child-minders. Some 12% of new mothers are unable to use childcare, the
main reasons cited (47% of cases) being a lack of available places and limited
opening hours. This is especially the case of mothers in the South and Islands. The
fairly limited use of private childcare facilities is principally due to the costs (20%
of cases), which are particularly high for mothers resident in the North.
3.4 Selection into Motherhood and Endogeneity
The main problem when studying new mothers’ employment patterns with the
IBSS data was the potential selection into motherhood bias due to the correlation
between fertility and employment decisions. In the IBSS, employment patterns are
observed only for mothers. The unavailability of a control group of women
without children could have given rise to biased estimates if a selection process
underlying the fertility decision was at work and was ignored.7
The test for selection into motherhood was performed using the Heckman
approach (Heckman 1979). For the sake of simplicity, we report only the results of
the tests; a more detailed description of the procedure can be found in Casadio
et al. (2008).
Since the IBSS does not contain information about women without children, we
were forced to use external data. We drew on the Survey on Household Income
7
In the IBSS data, the sample selection problem may heavily bias estimates of the probability of
new mothers being in work 18–21 months after childbirth. Consider, for example, the extreme
situation in which women’s working conditions are either fully protected (as in the public sector)
or not protected at all (as in the case of a fixed-term contract with a small private firm). If the
degree of protection were the only determinant of having children—total sample selection—only
women benefiting from a high degree of job protection would have a significant probability of
having a child. As a consequence, the sample would consist mainly of mothers working in
protected sectors, and most of them would retain their jobs after childbirth. Ignoring this selection
process would probably give rise to wrong conclusions (for example, according to the data,
employment protection legislation would have little effect on new mothers’ employment
patterns).
44 A. Neri et al.
and Wealth (conducted by the Bank of Italy), from which we selected a sample of
women. A post-stratification of weights was then performed according to the
distributions of women’s age, level of education, and geographical area of resi-
dence, using census data for the purpose. This technique made the selected sample
of women representative of the whole population and, therefore, comparable with
the IBSS survey.
In the selection equation, the probability of having a child (0–3 years old) was
estimated given a set of mothers’ characteristics: age, level of education, geo-
graphical area, size of municipality of residence, and distance (in hours) from
relatives. The ‘excluded instrument’ was the number of mother’s siblings which
was assumed to be a proxy for mother’s preference for children. After controlling
for the mentioned covariates, the hypothesis of no selection could not be rejected
with a significance level of 0.78.8
The correlation between fertility decisions and employment patterns may also
have resulted in the endogeneity of the decision of whether or not to have more
than one child. For instance, working mothers with one child may decide not to
have another child so that they can more easily reconcile work and family (they
may have an unobserved low propensity for large households). This hypothesis
was tested, for the IBSS data, using a bivariate probit model. We jointly modelled
the probability of having more than one child and the employment probability. The
‘excluded instrumental variable’ used in the first equation was the number of
pregnancies undergone by the mother before having her last child (including
abortions and miscarriages). This variable is a proxy for women’s difficulties in
having a child, and it is strictly related to the decision to have more than one child.
It can be assumed to be unrelated to employment decisions. More than one test was
performed using different response variables (more/less than one child, more/less
than two, more/less than three), and they showed that neither could the hypothesis
of no endogeneity be rejected.
3.5 Mothers’ Probability of not Being in Work

18–21 Months After Delivery
In this section we analyse the factors influencing the new mothers’ risk of not being
in work 18–21 months after delivery. In the IBSS, the time span of 18–21 months
after childbirth is the only period available to study mothers’ employment patterns.
However, this period is also the most informative, given Italian legislation on
8
A similar result is reported by Bratti, Del Bono and Vuri (2005). In order to test for selection
into motherhood, the authors estimated a probit model with sample selection, where the selection
equation was represented by the decision to have a first child and the main equation was the
employment equation. In none of the specifications of their model did they find a significant
correlation between the error terms of the employment and fertility equations.
maternity leave—covering at most 12 months after delivery—and considering the

results of previous studies on women’s career interruptions.9
The model used was the following bivariate probit:
Y1i ¼ 1fX1i b1 þ e1i 0g

Y2i ¼ 1fX2i b2 þ Z2i c þ e2i 0g
where the error terms have a bivariate normal distribution with a correlation
coefficient q = 0.
In the first equation the dependent variable Y1i was a dummy variable indicating
whether or not the woman is inactive/unemployed. To be noted is that, unlike in the
LFS,10 in the IBSS survey no definition of unemployment is provided during the
interview. Previous studies show that, in Italy, the work attachment of unemployed
and inactive persons is very similar (Viviano 2002). We therefore merged the two
categories.
The explanatory variables were: mother’s individual characteristics, including
age, nationality, and level of education; spouse/live-in partner’s characteristics
(his employment position and level of education); composition of the household,
including the presence of grandparents; mother’s working status and attainment
before childbirth, such as job position and type of contract (part time/full time,
permanent/fixed term); social services indicators (the share of available places in
nursery schools for children aged under 3, on a regional basis).11
In the second equation the response variable was a dummy indicating whether
or not the child attended a nursery school. The reason for including this equation
was that it enabled us to take into account the simultaneity of mother’s decisions.12
The covariates were the same as those included in the first equation plus two
variables intended to proxy the latent attitude towards nursery schools: i.e. dummy
variables indicating that, according to the interviewee, socialisation and
9
As documented in Solera (2003), Italian women are unlikely to experience a career break more
than once in their lives, and this usually occurs in correspondence with the birth of the first child.
Moreover, Bratti et al. (2005), on analysing the new mothers’ employment decisions during the
3-year period following the birth of the first child, found that the probabilities of employment are
very similar in each year of observation.
10
In the Labour Force Survey, the definition of an unemployed person given to the respondent
was someone who had actively looked for a job in the 60 days previous to the interview and
intended to start work immediately. This measure could be therefore quite different from that
used by the IBSS.
11
We initially also included regional dummy variables and labour market indicators, but their
effect was then captured by women’s employment status during pregnancy. These variables were
therefore not included in the final specification of the model.
12
It is important to note that this variable could not be included among the covariates of the first
equation because it was endogenous. Indeed, the probability of schooling a child depends, among
other things, on whether the mother is working, on the household’s total income, and on
nationality. We also tested for the absence of endogeneity of this variable, and the results showed
that this hypothesis must be rejected.
46 A. Neri et al.
educational methods are of key importance in a child’s growth.13 The results show
that there is a strong negative correlation between the use of a nursery school and
the probability of not working (q = -0.55).
The unconditional average probability of not working after delivery is about
49%. As expected, an increase in the mother’s age reduces this probability
(see Table 3.1). By contrast, mothers aged under 24 seem to face greater difficulties:
their average probability of not working is about 72% (23 points above average).
Education level also plays an important role. The higher this level, the lower the
probability of not working: on average, a mother with a university degree is about
43% points more likely to work than a mother with compulsory schooling.
The risk of not working after childbirth is slightly greater for mothers with a
previous child aged under 3. This result may reflect the fact that mothers whose
youngest child is aged over 3 are likely to have organised a network that enables
them to keep working. Therefore the arrival of a new baby has a lower impact on
their employment patterns.
The most important effect is exerted by the mother’s employment status before
childbirth. An inherited non-working status is very persistent, and almost com-
pletely so for housewives and students with no previous working experience.
Compared to those mothers, the chances of finding a new job significantly increase
for women with some past working experience.
At the opposite extreme, mothers who are managers or entrepreneurs, and
mothers benefiting from the employment protection provided by the public sector,
display a close attachment to their profession. A possible explanation for this is the
high implicit costs that these mothers would incur if they had to leave their jobs.
Moreover, in the public sector, mothers are likely to have more flexible working
hours, which makes it easier for them to reconcile work and family life.
The importance of employment protection is confirmed by the magnitude of the
coefficients relating the type of contract. Working mothers with previous
temporary contracts have a significantly higher probability of not working after
childbirth compared to mothers with permanent jobs.
The family network has a great influence as well. The presence of grandparents
increases the probability of working by about 25%. Of course, the presence of
elderly relatives may require women to devote time to caring for residing and/or
non-residing elderly kin. Although this effect cannot be estimated, the results show
that the positive effect is larger than the negative one due to the need to care for the
elderly (this is consistent with previous research, see Marenzi and Pagani 2008).
Finally, also the availability of childcare services is associated with the employ-
ment probability. In regions where the proportion of young children (0–2) using
crèches is higher than 12%, the new mothers’ probability of being employed doubles
with respect to those regions where less than 10% of 0–2 children use childcare.
13
Under the assumption that those variables are not correlated with the error terms in the first
equation they represent two ‘‘excluded instruments’’. In case this assumption doesn’t hold, the
results cannot be interpreted as casual effects.
Table 3.1 Probability of not being in work 18–21 months after childbirth
Variable Marginal probability of
Not being in work Using crèches
Mother’s age at childbirth
B24 72.0 41.1
25–29 51.9 25.3
30–34 43.8 20.0
35–39 40.7 18.6
40 ? 41.6 19.5
Mother’s education
Compulsory schooling 67.9 36.3
High school diploma 43.6 20.0
University degree 24.5 9.3
Mother’s nationality (Foreign) 65.2 39.8
Children before pregnancy
None 55.7 28.5
Youngest child aged 0–2 59.1 31.8
Youngest child aged over 6 55.9 28.1
Mother’s previous employment status
Housewife without working experience 99.4 79.2
Housewife with working experience 90.2 40.2
Student without working experience 99.8 86.6
Student with working experience 63.6 21.7
Employed in private sector
Manager, middle management 12.9 2.5
Office worker, school teacher 18.4 3.9
Factory worker 37.6 7.9
Entrepreneur 11.9 1.3
Member of arts or professions 8.2 1.2
Sole proprietor and other self-employed 20.6 2.6
Employed in public sector 9.7 1.2
Mother’s type of contract
Permanent status, working full time 37.1 8.4
Permanent status, working part time 40.2 9.4
Fixed-term contract working full time 51.9 12.5
Fixed-term contract working part time 59.6 13.6
Partner’s working status
Not employed/single mother 58.8 25.7
Office worker 49.8 24.8
Entrepreneur, self-employed 49.9 24.4
Partner’s level of education
Presence of grandparents 24.7 2.7
(continued)
48 A. Neri et al.
Table 3.1 (continued)

Not being in work Using crèches
Child-care systema
Less than 10% 59.4 30.3
10–12% 35.5 15.2
More than 12% 29.1 13.9
Total 49.2 24.1
a
Proportion of young children (0–2) using public child-care
3.6 The Determinants of Voluntary Transition

to Non-employment After Childbirth
In this section we focus on mothers who are employed at the beginning of preg-
nancy, and we analyse the determinants of voluntary withdrawal from the labour
market after delivery. The sub-sample analysed consisted of 9,894 units.
As in the previous section, we take into account the simultaneity of mother’s
decision using a bivariate probit.
In the first equation the dependent variable was a dummy indicating whether the
mother had declared that she had left her job voluntarily (and was not working at
the time of the interview). These women represented 14% of cases. The decision to
leave was mainly motivated by ‘‘the need to spend more time with children’’
(60%) or by ‘‘difficulties in reconciling work and family life’’ (20%). This variable
was therefore a good proxy for the mother’s decision to leave work to take care of
her family if no reconciliation was possible.
As expected, the availability of a nursery school was negatively related to the
probability of voluntary exit (q = -0.65).
Table 3.2 summarises the results of the analysis. As to employment status,
employees, and in particular factory workers, show a higher propensity to leave
their jobs than entrepreneurs and members of the arts and professions.
The degree of job stability and protection confirms its importance in helping
mothers into paid employment. For mothers working in the public sector, the
average exit probability is 5% (about one-third of the overall mean). By contrast,
in the trade and services sector this probability increases to 18%. A stronger effect
is produced by fixed-term contracts, which increase the exit probability to 46%
when the mother is also working part time.14
14
By contrast, fixed-term contracts do not seem to a have an appreciable impact. This is not
surprising, given the dependent variable. In the analysis, if the contract expired and was not
renewed, it was not classified as resignation.
Table 3.2 Probability of voluntary work exit after childbirth

Voluntary exit Using crèches
Mother’s age at childbirth
B24 26.0 3.6
25–29 15.3 2.0
30–34 12.4 1.6
35–39 10.5 1.4
40 ? 9.4 1.1
Mother’s level of education
Compulsory or not schooling 23.3 2.9
Mother’s nationality (Foreign) 23.5 3.5
Mother expecting a new baby 14.6 1.8
Children before pregnancy
None 14.5 2.1
Youngest child aged over 6 12.7 1.2
Employed in private sector
Office worker, school teacher 13.0 2.0
Factory worker 28.1 3.6
Entrepreneur 1.1 0.0
Member of arts or professions 4.4 0.6
Sole proprietor and other self-employed 12.1 1.0
Employed in services/commerce sector 18.2 2.6
Employed in public sector 4.7 0.4
Mother’s type of contract
Permanent status, working full time 11.8 1.6
Permanent status, working part time 15.4 1.3
Fixed-term contract, working full time 33.1 4.2
Fixed-term contract working part time 46.4 6.6
Partner’s working status
Not employed/single mother 13.6 1.3
Office worker 15.4 1.3
Entrepreneur, self-employed 46.4 6.6
Partner’s level of education
Presence of grandparents 5.9 0.1
Childcare systema
Less than 10% 15.7 1.9
10–12% 12.6 1.7
More than 12% 9.5 1.9
Total 13.8 1.8
a
Proportion of young children (0–2) using public child-care
50 A. Neri et al.
Among demographic characteristics, age and level of education exert the

strongest influence. For working mothers aged under 24, the probability of quitting
work is 26% (twice the average).
The level of education confirms its influence not only on labour-market
entry but also on the decision not to leave it after childbirth. For mothers with
a university degree, this risk decreases by about 16% compared to mothers with
the lowest level of education. As in the previous analysis, the probability
of withdrawing is—on average—higher for mothers with a previous child aged
under 3.
The partner’s working status has a significant influence on a mother’s decisions.
When the partner is an entrepreneur or a self-employed worker, the probability of
voluntarily quitting work increases to about 46%.
The presence of grandparents significantly prevents withdrawal by mothers: the
exit probability decreases by about a half.
Moreover, the likelihood of leaving the labour market decreases in areas with a
better supply of childcare services. In regions with a low availability of childcare
places (less than 10%) the probability of voluntary exit is about 16% (two points
above the overall average). This percentage drops to about 9% in areas with the
higher supply of public childcare services.
Italy stands out among European countries in that it combines one of the lowest
female employment rates with one of the highest long-term unemployment rates.
Even the large increase in female participation since 1995 has been insufficient to
close Italy’s gap with other European countries, and especially so in its Southern
regions.
In this paper we have focused on the employment patterns of Italian mothers
during the childbirth period. In the 2 years surrounding childbirth, 20% of women
in employment before pregnancy leave the labour market, while only 4% start to
work after delivery. Most of the drop-out probability—about 70%—is due to
voluntary work exit, while one-fourth is due to temporary employment or firm’s
bankruptcy.
Both the risk of not working and of voluntary leave after childbirth vary
according to a similar set of characteristics. The presence of grandparents is
probably one of the key factors in increasing the probability that a mother will
remain in the labour market. A second important factor is the availability of public
childcare facilities.
Human capital variables have a significant influence on the continuation of
mothers in paid employment. As education and job attainment levels increase, so
the unemployment and voluntary exit probabilities fall, because of the high
(implicit) costs incurred by highly-educated and well-paid mothers if they leave
their jobs.
The mother’s age plays an important role as well. In particular, mothers aged
under 24 seem to have the greatest difficulties in reconciling work and family.
Their average probability of not working is about 70% (the average is 49%), and
their probability of voluntarily leaving their jobs is about 25% (twice the average);
the latter probability jumps to 53% for those women unable to obtain any help
from family or public services.
The probability of staying in work also grows with the degree of job protection.
When mothers work in the public sector, the probability that they will not work
after delivery decreases by about 25%. Conversely, the probability for mothers
with fixed-term jobs increases by 23%.
Overall, part-time contracts have a positive net effect on the employment rate.
Nevertheless, some points should be noted. On the one hand, a part-time contract
may be an important alternative to unemployment. About 17% of the women in the
sample shifted from full-time to part-time work in order to reconcile family and
work. On the other hand, the probabilities of unemployment and of voluntary exit
increase significantly for mothers working part time during pregnancy. A possible
explanation for this is that the previous choice of a part-time job may also be an
indicator of lower labour-market attachment. Moreover, in most cases the low
attractiveness of such jobs in terms of remuneration, working hours and self-
fulfilment may convince mothers that being employed is not worthwhile.
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Chapter 4
Part-Time and Temporary Employment:
A Gender Perspective
Tindara Addabbo and Donata Favaro
4.1 Introduction
The focus in this chapter is on part-time and temporary work; we analyse these two
different types of ‘non-standard’ work from a gender perspective. Our interest in
these types of non-standard work is justified by their increasing weight with
respect to total employment in Italy. At the same time the over-representation of
women in jobs of this type—especially part-time work—and the risks of
employment segregation to the disadvantage of women, as outlined by the liter-
ature (Sect. 4.2), require a gender perspective. We will try to disentangle not only
the inequalities in the take-up of non-standard work by gender but also the gender
differences in the determinants, and the factors conducive to the ‘choice’ of non-
standard employment (Sect. 4.4).
The literature shows that a lower proportion of temporary workers than part-
timers describe themselves as voluntary. Moreover, amongst voluntary part-timers,
previous analyses have shown that for women there is a higher share than for men
of those workers who state that they are voluntary part-timers for family reasons.
Given the higher percentage of part-timers amongst employed women and the
significant share of women indicating that they have chosen part-time work for
family reasons, we have investigated more in depth in Sect. 4.5 the reasons for
T. Addabbo (&)
Department of Economics, University of Modena and Reggio Emilia,
Viale Berengario 51, 41121 Modena, Italy
D. Favaro (&)
Department of Economics M. Fanno, University of Padova,
Via del Santo, 33, 35123 Padova, Italy
e-mail: donata.favaro@unipd.it

54 T. Addabbo and D. Favaro
working part-time in Italy, taking into account also the observable probability of
people working part-time because there is no alternative.
Another crucial issue in the analysis of non-standard employment relates to the
costs of being in non-standard work. Previous research has uncovered the costs in
terms of lower wages, lower career perspectives and lower training (Sect. 4.2). In
this chapter we will analyse the costs in terms of hourly wages, and the probability
of gaining a supervisory role. Further, we will try to assess the costs in terms of the
development of other significant dimensions of well-being. For this purpose we
use the Italian Survey IT SILC (Sect. 4.3) part of the wider European Statistics on
Income and Living Conditions Survey, a set of data that allows us to recover not
only the money costs of different employment positions but also the costs con-
nected to other dimensions of well-being, such as access to health services, that we
will take into account in Sect. 4.6.
4.2 Part-Time and Temporary Employment:

Trends, Reasons and Outcomes
Temporary employment has significantly increased in Italy: by 52% from 1993 to

2006, with an increase in the overall share of women in temporary employment
(51% of temporary employees in 2006).1 Women are more often found in non-
permanent employment than men, as is true also in other European countries
(Goudswaard and Andries 2002).
The literature on temporary work conditions has underlined the wage penalty
associated with temporary work (Booth et al. 2002; Kalleberg et al. 2000; Mertens
and McGinnity 2004), with a higher gap at the bottom of the distribution (Comi
and Grasseni 2009; Mertens et al. 2007).
Temporary employees are also characterized by a lower access to training
(Arulampalam and Booth 1998; Booth et al. 2002; OECD 2004; Connell and
Burgess 2006), by a higher perception of job insecurity (De Witte and Naswall
2003) and by lower job satisfaction (Booth et al. 2002; Kaiser 2005; Siebern-
Thomas 2005; Berton et al. 2009) with special regard to such job components as
employment stability, wages and career prospects.
The literature also shows that for most women temporary work is involuntary
(Amuedo-Dorantes 2000; Morris and Vekker 2001; Polivka 1996).
The costs associated with temporary work and the higher likelihood of this
choice being involuntary, have led us to investigate more in depth the determinants
of temporary labour supply (Sect. 4.4) and the implications in terms of hourly
wages, possibility of supervisory status and access to health services and treat-
ments (Sect. 4.6).
1
Altieri, Ferrucci and Doto (2008) elaboration based on Istat Labour Force Survey data.
4 Part-Time and Temporary Employment 55
Part-time work is a form of non-standard employment mostly concentrated on

women. In 2008 the share of women working part-time ranged from 14.1% in
Poland to 59.9% in the Netherlands, with an average of 31.5% at EU-15 level
against 7.5% for men (OECD 2009). Though decreasing, compared to 1998 (when
it was 78.7% at EU-15 level) the majority of people working part-time are female
(77.2% in 2008 at EU-15 level, OECD 2009) and the gender gap in this type of
employment is the highest (Burchell et al. 2007). Institutional factors have affected
the late development of part-time work in Italy (Addabbo 1997, 2003a). Part-time
work as a percentage of total employment in Italy has increased from 11.2% in
1998 to 16.3% in 2008, women’s share of total part-time work increasing from
71.9% in 1998 to 75.8% in 2008; the percentage of women employed in part-time
jobs is now similar to the EU-15 average.2 Notwithstanding that the European
directive on part-time work (Council Directive 97/81/EC of 15 December 1997)
stresses the principle of non-discrimination, still there is evidence of employment
segregation and wage differentials in European countries with respect to part-time
work. The literature has shown that part-time work is more likely to be associated
with menial jobs, with lower pay, lower upward mobility and lower satisfaction
with regard to career perspectives (Berton et al. 2009; Blank 1990; Connolly and
Gregory 2008a, b, 2009; Ferber and Waldfogel 1998; Francesconi, 1991; Manning
and Petrongolo 2008; Mumford and Smith 2009; Tam 1997; Tilly 1996; Villosio
2001). However, after accounting for differences in accumulated skills, prefer-
ences and job characteristics there is a little evidence of a part-time wage penalty
for women in the USA according to Hirsch (2005); and part-time wages are higher
in the Australian labour market, according to the analysis made by Booth and
Wood (2008). The different degree of labour market attachment shown by women
working part-time has been found to be related to the disadvantageous wage gap
differential; this was, for example, observed in the UK prior to the abolition of less
favourable treatment rules for part-time workers (Bowlus and Grogan 2009).
The higher concentration of part-time workers in low-paid jobs led Bardasi and
Gornick (2008) to focus on occupational segregation as a cause of the wage
differentials observed between part-timers and full-timers in their international
(USA, Canada, Italy, UK, Germany and Sweden) analysis, which shows hetero-
geneity in respect of the weight of observed differences in explaining wage dif-
ferentials between full-timers and part-timers, and a prevalence, amongst the
observed differences, of the occupational component. Differences between the
occupations of part-time and full-time women are found to be the most important
cause of the wage penalty of women working part-time by Manning and
Petrongolo (2008); analysis in Britain also shows that an increased differential can
be explained by differences in occupational distribution.
By extending analysis of the outcomes of part-time work to other dimensions of
individual and family well-being, Booth and Van Ours (2009) found a positive
aspect of part-time work in the job satisfaction felt by part-time women, in contrast
2
OECD (2009).
to women working full-time, as shown by their analysis of the interaction between

partners’ employment conditions in Australian couples. However, Booth and Van
Ours (2008) had reached a different conclusion from a similar analysis of British
women: part-time work raises job satisfaction but does not affect life satisfaction.
Another key point in evaluating the costs of part-time employment is to assess
the extent to which part-timers state that their part-time employment is voluntary.
According to Barrett and Doiron’s (2001) findings on Canada, involuntary part-
time workers are more likely to earn lower wages than other workers, and the wage
penalty is mostly related to selection effects and differences in the returns, rather
than in differences in characteristics. Involuntary part-time workers are also
characterized by a lower degree of job satisfaction in Italy according to the
analysis of Berton, Richiardi and Sacchi (2009) of Isfol Plus data. Involuntary
part-time work turns out to be relevant also in terms of the likelihood of switching
to full-time employment. Employees in involuntary part-time work in the USA
have been found to be more likely to switch to full-time jobs afterwards (Stratton
1996). The higher heterogeneity in the individual motives stated with respect to
part-time choice and the implications outlined by the literature have led us to
investigate the extent and determinants of involuntary part-time employment in
Italy (Sect. 4.5).
4.3 The Data
With the aim of measuring the costs of being in part-time or temporary work
positions not only in terms of income, but also in terms of other dimensions of
well-being (e.g. access to health services and treatment), and of having a wider
view on the interaction between non-standard employment and living conditions,
we have looked for a set of microdata allowing a wider assessment of worker well-
being.
Another focus of this analysis is the question of whether employment condi-
tions are an outcome of choice or are constrained by different factors. In addition,
the regional differences observed in the Italian labour market require a data set that
allows for regional disaggregation.
In order to serve the different aims of analysis we have used microdata from the
IT SILC 2006 survey in the wider European Statistics on Income and Living
Conditions survey programme. The EU Survey on Income and Living Conditions
(EU-SILC) is a European assessment of households’ living conditions, with spe-
cial attention to different forms of deprivation and social inclusion; this provides
the possibility of analysing the costs of being in non-standard work not only with
reference to lower labour income, but also with respect to other relevant dimen-
sions of well-being (such as access to health services). Moreover the survey col-
lects information on individual education, health and employment conditions and
allows us to collect data on the reasons for working less than 30 h that can be used
to account for involuntary part-time work.
The Italian survey IT SILC has been carried out since 2004 on a sample that
allows statistical significance at regional level.3 The data set used in this chapter
refers to the IT SILC 2006 cross-sectional survey of 21,499 households and 54,512
individuals. The sample is made of 17,835 women and 17,384 men aged from 16
to 64. Amongst those who are employed, 21% of women are in part-time jobs,
against 4% of men; and more employed women (21%) than men (15%) are in
temporary jobs.
Part-time work amongst women employees runs at 22% in the North, 20% in
the Centre and 21% in the South, where more women and men are in temporary
jobs (23% of men and 30% of women). Temporary work is more spread out
amongst younger age groups in the phase of entry into the labour market. It
involves from 44% of women in the youngest age group in the North up to 53% of
women employees in the 16 to 24 age group in the South. However the incidence
of temporary work is still high in the 35 to 44 age group for women (probably
when they re-enter the labour market after an interruption connected to child birth)
and the gender gap increases.
4.4 Being in Non-Standard Work: A Gender

Analysis of Determinants
The higher share of women in temporary and part-time positions compared with
men, combined with the higher risk of experiencing costs in terms of wages, job
satisfaction and career prospects, lead us to devote attention to the factors affecting
the probability of being employed as temporary or part-time workers. We shall
adopt techniques that allow us to disentangle gender differences in the determi-
nants of employment conditions.
For this purpose we have estimated separate equations for men and women on
the probability of being in non-standard employment in order to compare the
different effects of the same covariates by gender.
Another key issue for the specification of the econometric model to be used for
the estimation concerns the correlation between the employment choice and the
probability of being employed in a non-standard position. In order to account for
the correlation of these two probabilities we have estimated a bivariate Probit
model that allows us to test the correlation of the residuals from the two models
whose estimated coefficients are reported in Tables 4.1 and 4.2.
As discussed in Sect. 4.2, according to the existing literature, being in a tem-
porary work position leads to lower job security and lower job satisfaction, and is
more likely to be a non-voluntary status. In the final section of this chapter we will
try to estimate the costs of being temporary workers in terms of lower earnings,
lower likelihood of being in a supervisory position, and lower access to health
3
For a wider description of the survey see Istat (2008).
Table 4.1 Bivariate Probit estimation on the probability of being in temporary work
Women Men
Emp. Temp. dy/dx Emp. Temp. dy/dx
Age 0.146** 0.052** 0.010 0.030* 0.087** -0.003
(20.33) (5.46) (2.45) (4.72)
Age squared -0.002** -0.001** -0.000 0.000 0.001** -0.000
(18.82) (7.06) (1.07) (4.85)
Married or cohabiting -0.104* -0.107* -0.020 0.078 -0.350** -0.031
(2.48) (2.06) (1.63) (4.39)
Separated or divorced -0.013 -0.034 -0.006 -0.046 -0.043 -0.016
(0.22) (0.45) (0.66) (0.37)
Widow -0.139 -0.059 -0.011 0.272 -0.015 -0.011
(1.74) (0.51) (1.36) (0.05)
Chronic illness -0.010 0.008 0.001 0.055 0.291** 0.002
(0.28) (0.16) (1.10) (3.82)
Number of children -0.015 -0.004 -0.001 -0.022 0.007 0.004
aged less than 15 (0.74) (0.17) (0.95) (0.16)
High school Education 0.339** 0.047 0.009 -0.020 -0.052 -0.025
(11.64) (1.23) (0.58) (0.70)
University degree 0.461** 0.184** 0.037 0.008 0.031 0.035
or post-graduate (10.43) (3.41) (0.16) (0.26)
Living in the South -0.599** -0.101** -0.018 -0.012 0.126* 0.035
(21.61) (2.71) (0.32) (1.99)
Industrial, firm size and job position dummies included
Constant -2.680** -1.799** 1.500** 0.224
(20.66) (10.59) (6.23) (0.56)
Observations 17,835 17,835 11,799 11,799
Wald Test for rho = 0
Chisquare(1) 763.192 132.99
Prob [ chi2 0.0000 0.0000
Robust z statistics in parentheses
*significant at 5%; **significant at 1%
services; while in this Section we try to detect the different factors affecting the
probability of working in a temporary position and how their effect differs by
gender.
To account for the correlation between the probability of being employed and
the probability of being in a temporary job we have chosen to estimate a bivariate
Probit model that allows us to estimate the factors affecting each job while at the
same time testing for the correlation of the residuals from the two models. As
Table 4.1 shows, the Wald test for the null hypothesis leads to a rejection of the
null hypothesis of absence of correlation of the residuals of the employment and
temporary probability equations both for men and for women. The two equations
appear to be strongly correlated.
A different set of variables has been introduced as covariates in the two
equations: together with factors such as demographics, civil status, education,
Table 4.2 Bivariate probit on the probability of working part-time and being employed
Women Men
Emp. Part-time dy/dx Emp. Part-time dy/dx
Age -0.001 -0.030 -0.008 -0.030* -0.087** -0.006
(0.09) (1.76) (2.45) (4.72)
Age squared -0.000 0.000 0.000 0.000 0.001** 0.000
(0.61) (1.32) (1.07) (4.85)
Married or cohabiting -0.019 0.340** 0.092 0.078 -0.350** -0.027
(0.32) (5.66) (1.63) (4.39)
Separated or divorced 0.064 0.072 0.020 -0.046 -0.043 -0.003
(0.77) (0.82) (0.66) (0.37)
Widow -0.031 0.229 0.069 0.272 -0.015 -0.001
(0.23) (1.69) (1.36) (0.05)
Chronic illness 0.081 0.173** 0.049 0.055 0.291** 0.026
(1.24) (2.78) (1.10) (3.82)
Number of children aged less -0.043 0.260** 0.072 -0.022 0.007 0.001
than 15 (1.35) (8.94) (0.95) (0.16)
High school education 0.319** -0.271** -0.076 -0.020 -0.052 -0.004
(6.55) (4.82) (0.58) (0.70)
University degree or post- 0.137* -0.373** -0.093 0.008 0.031 0.002
graduate (2.27) (5.04) (0.16) (0.26)
Living in the South -0.070 -0.063 -0.016 -0.012 0.126* 0.009
(1.32) (1.11) (0.32) (1.99)
Constant 1.051** -0.009 1.500** 0.224
(3.33) (0.03) (6.23) (0.56)
Industrial, firm size and job position dummies included
Observations 8,079 8,079 11,799 11,799
Chi2 (1) 4.19 0.01
Prob [ chi2 0.04 0.92
region, and number of children aged less than 15, that are common to the set of
covariates in both equations, the covariates of the temporary employment equation
include also a set of dummies to control for variables in firm size, type of industry,
and job position.
Turning to the results of our analysis we notice a different demographic
involvement of men and women in the probability of being in a temporary work
position, with temporary work being more likely to occur for younger men and for
older women, in different phases of their life cycle and career. The effect of civil
status is seen in relation to gender too, with married women being less likely both to
work and to being found in a temporary work position, and married men to be more
likely to be employed but less likely to be in temporary work. For men being married
or cohabiting reduces by 3% their probability of working in a temporary job.
The effect of chronic illness on the probability of being in a temporary job

appears to operate only in respect of men: it increases their probability of being
employed in a temporary job though by only 0.2%.
Turning to the variables that measure the level of education, another interesting
difference can be outlined: having a higher level of education has a positive and
significant effect on women’s probability of being employed; however, having a
university degree exposes more women to the risk of being in a temporary work
position by 3.7%, a significant effect that does not operate in relation to men. This
may be connected to a higher likelihood that graduate women enter employment
through the channel of a spell of temporary employment.
Living in the South decreases the employment probability of women and their
probability of being employed in temporary job (by 1.8%), while significantly
increasing the probability of men being in temporary work (by 3.5%).
The industry-type, firm size and job position variables that have been included
to control for labour demand factors and are not reported in the Table, confirm a
lower probability for workers in firms with 50 or more employees to be found in
temporary work, and a lower probability that employees in apical positions have a
temporary contract. Industrial dummies also allow for the detection of a different
effect as far as the temporary employment probability is concerned for men and
women working in the same sector. In this regard we can see that, compared to
being employed in the trade sector, being employed in the personal and protective
services sectors is going to increase the probability of women being in temporary
work, whereas men appear to be more exposed to the risk of being in a temporary
positions in the hotel and restaurant sectors.
To summarize: the results of this assessment confirm heterogeneity in the
composition of temporary workers. For men, the probability of being in temporary
work is significantly higher for younger men, men with chronic illness, and men
who live in the South of Italy; whereas for women the probability of being in a
temporary work position increases with age, and level of education. If they live in
the South of Italy, the probability of being employed at all, even in non-standard
work, diminishes. Moreover differences in the probability of being in temporary
work positions, by gender, occur inside each industry with respect to being
employed in the trade sector. On the whole these estimates suggest that it is crucial
to distinguish the impact of different factors by gender and to take into account the
simultaneity and joint distribution of the employment and temporary work prob-
abilities equations.
We then analysed the determinants of part-time probability by estimating,
consistent with the need to allow for the simultaneity of the employment and type
of contract probabilities and to detect different impacts of the covariates by gender,
two different bivariate Probit models. However the test for the correlation of the
residuals of the two equations, whose results are reported in Table 4.2, allows
rejection of the null hypothesis of the absence of correlation only for the sample of
women. The choices of being employed and being employed as part-timers seem
not to be associated for men whereas they are correlated for women.
As the results of the estimation show, we can confirm the expected gender
differences in the discouraging effect of being married or cohabiting on women’s
employment probability, whereas the probability of working part-time increases
for married or cohabiting women—by 9.2%—and decreases for men—by 2.7%. In
a difference from what has been found with regard to the probability of being in a
temporary work position (Table 4.1), married women are more likely to be in a
part-time work position. This is in line with the higher share of women who accept
part-time work for family reasons, thereby illustrating the role of part-time work in
easing the work-life balance.
The distribution of care work inside Italian families, the rationing of public
childcare services and the low diffusion of full-time school for children aged less
than 15 can affect the observed differences also in the coefficients connected to the
number of children in the households in this age group: as the multivariate analysis
shows, women are more likely to be working part-time the higher the number of
children in the household aged less than 15, whereas men’s part-time labour
supply appears not to be related to the family work-load. If on the one hand this
result confirms a positive role for part-time work in easing the work-life balance,
on the other hand it is in line with the literature which stresses the importance of
the constraints affecting women’s labour supply and the effect of the presence of
children in working hours decisions (amongst others: Addabbo 1999, 2003b;
Addabbo et al. 2010; Del Boca 2002; Del Boca and Locatelli 2007; Del Boca et al.
2007; Paull 2008; Vosko and Clark, 2009; Weinkopf 2009).
Turning to the effect of human capital investment on employment and part-time
probability, the results confirm a higher involvement of more educated women in
employment, consistent with previous evidence on female labour supply in Italy
(Addabbo 1999; Bettio and Villa 1999), and a lower probability that more edu-
cated women are in part-time positions. The latter result differs from the effect of
education on temporary work probability: we found a greater temporary
employment probability for more educated women (Table 4.1). If a higher level of
education can lead to entry into temporary work positions—and this is a wide-
spread phenomenon in Italy for younger, more educated cohorts of women—then
having a higher level of education leads women to opt for different choices as far
as full-time and part-time work is concerned. On this topic we should point out that
the term ‘‘part-time’’ includes also permanent positions that are also more difficult
to revert to full-time in Italy. Previous analyses (Addabbo 1999) have shown that
more educated women are also less likely to be affected in their working decision
by the presence of children in the household.
We can consider these different impacts of education on part-time and
employment probability as a sign of segmentation within women in the Italian
labour market with more educated women more likely to be found employed and
in full-time work than less educated women.
Turning to the effect of regional variables, consistent with what we have found
in relation to temporary contracts, women living in the South are less likely both to
be employed and to be employed part-time. These effects however do not appear to
be statistically significant, whereas men appear to be more likely to work part-time
if they live in the South. The latter can be more likely to be in involuntary part-
time positions. The more likely occurrence of involuntary part-time work for men
in the South of Italy will be investigated in more depth in the following Section.
To account for labour demand factors we have controlled for industries, type of
job and company size in the part-time probability equations. Like the probability
of being in a temporary work position, the probability of being in part-time work
significantly decreases for women and men in apical positions. This result is in line
with the observed difficulties in career prospects for non-standard workers and will
be further investigated in Sect. 4.6 of this Chapter. The estimates of the effect of
industries and work positions variables, taking as a reference category white collar
employed in the wholesale and retail trade sector, confirm the lower probability of
blue collar men and women workers in manufacturing being employed in part-time
positions. The estimates also show different effects by gender within sectors.
4.5 To What Extent Working Part-Time

is an Outcome of Choice
Descriptive statistics and multivariate analysis results, shown in the previous

Sections, have outlined the gender differences on the probability of being in the
two forms of non-standard employment on which we focus in this Chapter. If
temporary work appears to be more likely to be involuntary, there is a higher
degree of heterogeneity in the individual motivations for working part-time. This,
together with the availability of data, lead us, having assessed the different factors
affecting part-time employment probability, to try and measure to what extent this
employment status is involuntary.
The data set used allows us to measure the extent of involuntary part-time work
by the use of information on the reasons for working less than 30 h a week.
Involuntary part-time work is then defined as the status of those who are part-time
and working less than 30 h a week for involuntary reasons. As the descriptive
statistics in Table A1 show, on average involuntary part-time work is more spread
amongst women aged 16–64 than amongst men in the same age group, in the
northern and central regions, with a higher weight in the youngest age groups,
whereas in the South of Italy for those aged 16–64 the percentage of involuntary
part-time work is similar by gender. However the share of men’s involuntary part-
time work is higher for younger workers while for women it is higher after they are
35 years old in the South of Italy. The latter can be related to the attempt to
re-enter employment after interruptions connected with child-birth. Such attempts
to find full-time employment can be unsuccessful and lead to spells of unem-
ployment or underemployment.
To capture the reasons leading to working part-time we have used the infor-
mation provided by IT SILC on the reasons part-timers give for working less than
30 h a week. Motivations connected to family factors are more spread amongst
women and in the North of Italy, whereas part-time work for involuntary reasons is
more spread amongst men, reaching the maximum in the South of Italy where 75%
of men working part-time less than 30 h state that they do so because they cannot
find full-time jobs. Voluntary part-time work is more spread amongst women
living in the North of Italy (Table A2).
We next focus on a particular group of part-timers—those who work part-time
for less than 30 h—and we analyse how different factors affect the probability of
people involuntarily working part-time for less than 30 h. This focus on invol-
untary part-time workers is justified because of the higher probability that these
workers face a weaker situation in the labour market in terms of the different
elements of their working conditions.
In order to model the probability of people involuntarily working part-time for
less than 30 h, we have used a Probit model with sample selection. The selection
equation refers to the probability of being employed part-time and less than 30 h.
The second equation is the Probit equation on the probability of involuntary part-
time work of less than 30 h.
The Wald test of the null hypothesis of absence of correlation between the
residuals of the two equations can be rejected. The results of the estimation in
Table 4.3 show that women are more likely to be found working involuntarily for
less than 30 h, compared to the reference category (clerks with less than high-
school education, employed in the trade sector in firms with less than 50
employees). Consistent with the findings of Barrett and Doiron (2001) on Cana-
dian data, the probability of being involuntary part-timers is lower for the more
educated employees. The negative coefficient of the variable on the number of
children aged less than 15 mirrors the higher probability of their mothers (more
likely to be found working part-time) stating that they work for less than 30 h, for
family reasons. The estimation includes as covariates dummies for industry, job
positions and size of the firms, in order to control for demand factors; their
inclusion allows the detection of heterogeneity amongst sectors and job positions
in involuntary part-time probability.
4.6 Evaluating the Costs of Part-Time

and Temporary Employment
We have seen in the previous sections how women appear to be over-represented,

compared with men, in part-time work; similarly, their share is higher than men’s
in temporary work. Analysis of the different factors affecting the probability of
being in non-standard employment has brought out gender differences, the higher
occurrence of involuntary part-time work amongst women, and the fact that vol-
untary part-time work for women appear to be strongly related to the presence of
young children in the family, or to their marital status. The results of previous
analyses bear out the need to account for gender differences in analysing the
Table 4.3 Probability of involuntary part-time

PT \ 30 h Involuntary PT Inv.PT dy/dx
Female 0.847 0.653 0.014
(14.17)** (4.48)**
Age 0.036 0.006 0.000
(2.41)* (0.27)
Age squared -0.001 -0.000 -0.000
(3.35)** (1.01)
Married or cohabiting 0.069 -0.075 -0.001
(1.18) (0.71)
Separated or divorced -0.108 0.095 0.002
(1.21) (0.62)
Widow 0.200 0.271 0.007
(1.50) (1.25)
Chronic illness 0.144
(2.64)**
Number of children aged less than 15 0.114 -0.111 -0.002
(4.16)** (1.98)*
High school education -0.181 -0.121 -0.002
(3.36)** (1.60)
University degree or post-graduate -0.365 -0.352 -0.005
(4.72)** (3.03)**
Living in the South -0.103 0.202 0.004
(2.09)* (1.69)
Firm with 50 or more employees -0.153 -0.135
(2.37)* (1.54)
Constant -3.006 -2.685
(9.04)** (5.30)**
Observations 22,141 22,141
Wald test of indep.eqns.
Chi2(1) 3.19
Prob [ chi2 0.074
Notes: Heckman Probit model where at the first stage, working part-time less than 30 h is
modelled. At the second stage, involuntary part-time work for less than 30 h is estimated
Industry and job position dummies included
determinants of non-standard employment. In this section we turn to the conse-

quences of this employment ‘choice’ by analysing the costs of part-time and
temporary work by gender, in terms of the holding of supervisory positions, hourly
wages and other dimensions of well-being.
Descriptive statistics on supervisory responsibility by type of contract and
gender are shown in Table A3. If we control for the type of contract computing the
share of workers with supervisory roles, we can see that women are less likely to
hold supervisory responsibilities than men in all types of contracts except part-time
jobs. Moreover the share of employees with supervisory responsibility is signifi-
cantly lower for temporary employees and part-timers.
In order to analyse the effect of being in non-standard work on the probability

of having a supervisory role, we have estimated a two-step Heckman Probit model:
the first step is on the probability of being employed, while the second step is on
the probability of having a supervisory role.4 This two-step procedure has been
followed due to the non-random selection of the employed sample; however, as the
results of the Wald test on zero correlation between the residuals of the two
equations show, the null hypothesis of absence of correlation between the two
steps cannot be rejected for the male sample.
The observed gap in access to positions of responsibility for part-timers and
temporary workers is confirmed by multivariate analysis controlling also for
personal, family and labour demand factors5 we can see that being part-time
employed decreases the probability of supervisory role by 6% for women and 10%
for men, and being in a temporary job decreases the probability of having a
supervisory role by 15% for men and 10% for women (Table 4.4). Though both
men and women are affected positively in their probability of having a supervisory
role by the length of their past work experience and level of education, gender
differences occur with regard to marital status: with respect to single married
women and widows, a decrease is shown in the probability of their being
employed and (though to a statistically insignificant extent) in being employed
with a supervisory role; while at the same time men’s employment and supervisory
role probabilities increase.
We then turn to the evaluation of the wage penalty associated with holding part-
time or temporary jobs. The observed gross wage gender gap is higher in part-time
positions than in full-time positions, but this does not occur in temporary positions
as compared to permanent jobs (Table A4).
The descriptive analysis shows the higher penalty in terms of hourly wages
connected to working in temporary jobs (the gap being 30% for men and 22% for
women) and a lower but still significant penalty when one works in part-time
positions (16% for men and 18% for women), the penalty being higher for men
from a comparison of permanent and temporary jobs, and for women from a
comparison of part-time and full-time positions.
To measure the wage penalties associated with temporary and part-time jobs we
have used multivariate analysis in order to control for individual, household, and
labour market variables affecting wages. To account for the non-random self-
selection of women into employment we have again estimated a two-step Heck-
man selection model.6 In the first step we have estimated the probability of being
an employee, including as covariates individual variables on the level of education
(high school, university or a higher level compared to a lower level of education),
marital status (married or cohabiting, divorced or separated, widow or single),
4
See van de Ven and van Praag (1981) for the application of correction for sample selection to
probit analysis.
5
In the second step of the model we controlled also sector and type of employment variables.
6
Heckman (1979).
Table 4.4 Probit model on the probability of having supervisory responsibility

Women Men
Employee Supervisory Sup.dy/dx Employee Supervisory Sup.dy/dx
Actual past work 0.179** 0.045 0.176** 0.053
experience (5.56) (5.89)
Part-time -0.259** -0.058 -0.394** -0.102
(4.17) (3.24)
Temporary contract -0.418** -0.104 -0.489** -0.148
(6.66) (7.43)
Married or cohabiting -0.175** -0.053 -0.013 0.616** 0.359** 0.109
(5.64) (1.01) (21.48) (6.68)
Sep. divorced 0.011 -0.052 -0.013 0.297** 0.210* 0.068
(0.29) (0.70) (7.95) (2.53)
Widow -0.214** -0.131 -0.031 0.293** 0.612** 0.219
(3.83) (1.25) (2.92) (3.20)
Number of children -0.009 0.042 0.010 -0.022 -0.010 -0.003
aged less than 15 (0.64) (1.47) (1.20) (0.38)
High school education 0.424** 0.220** 0.056 0.022 0.368** 0.115
(20.97) (3.79) (0.96) (9.24)
University degree or 0.817** 0.542** 0.160 0.042 0.893** 0.321
post-graduate (28.79) (6.26) (1.36) (13.65)
Living in the South -0.806** -0.019 -0.005 -0.380** -0.247** -0,073
(41.08) (0.25) (16.88) (5.84)
Firm with more than 0.096 0.025 0.103* 0.032
50 employees
(1.87) (2.46)
Sectors and types of job dummies
Age 0.203** 0.289**
(37.87) (61.55)
Age2 -0.002** -0.003**
(35.52) (58.86)
Chronic illness -0.055* -0.399**
(2.07) (14.38)
Constant -3.585** -1.342** -4.544** -1.175**
(36.07) (8.60) (50.42) (10.44)
Observations 16,282 16,282 13,922 13,922
Chi2 (1) 4.02 0.07
Prob [ chi2 0.0450 0.7858
regions (South compared to Centre-North), number of children aged less than 15,
other households’ income, and health status.7 The covariates included in the wage
equations are individual variables on past work history (measured by the declared
number of years, since starting the first regular job, that the person has spent at
work, as an employee or as self-employed), level of education (high school,
university or a higher level compared to a lower level of education), marital status
(married or cohabiting, divorced or separated, widow or single), industries
(dummies on different sectors have been included compared to manufacturing),
type of employment (different types of jobs have been included taking labourers as
reference group), regions (South compared to Centre-North) and job contract (part-
time and temporary compared to full-time permanent contract), and number of
children aged less than 15.
We have modelled men’s wages by estimating OLS regression and by intro-
ducing the same set of covariates as in the second step of the Heckman sample
selection model estimated on the sample of women, to allow for comparability of
the effect of the different factors analysed.
Amongst the covariates the dummy variables on part-time work (taking the
value as one if the individual is employed in a part-time position according to that
individual’s self-defined employment status) and on temporary work (taking the
value as one if the individual is employed in a temporary position in her main job)
have been included with their estimated coefficients, thereby providing a first
estimate of the existence of wage penalties associated with part-time and tempo-
rary employment.8
Being in a part-time position is found to significantly decrease women’s hourly
wages by 9% on average, while a temporary position decreases the gross hourly
wages of both men and women by 15% on average, taking into account family
structure, human capital accumulation, and type of industry as the results of the
multivariate analyses in Table A5 in the Appendix show.
With the aim of enlarging the evaluation of the costs connected to being in non-
standard employment we have analysed how, amongst employed individuals, the
unmet need for medical and dental care, related to its affordability, is affected by
different types of contract. Amongst workers as a whole, 13% have unmet needs
for medical or dental treatment and the share of those experiencing this problem
because they consider it unaffordable is higher amongst temporary workers, as
Table A6 in the Appendix shows.
To account for the bivariate outcomes of whether there are unmet medical and
dental needs, and whether they are unmet because unaffordable, we have estimated
7
The sample is made of employees not working in agriculture and working more than 9 h a
week. The first step of Heckman’s selection model for women refers to the probability of being an
employee working more than 9 h a week with respect to being unemployed or inactive. Self-
employed and employees working in agriculture sectors have been excluded due to higher
difficulties in measuring without error their hourly wages.
8
However, though we have controlled for relevant observable variables affecting wages, the
estimates provided can be still subjected to bias connected to unobserved heterogeneity.
Table 4.5 Probability of unmet need for medical or dental examinations or treatments for rea-
sons connected to cost
Unmet dental and medical Unmet because Unmet because not
examinations and treatments not affordable affordable dy/dx
Female 0.009 -0.022 -0.002
(0.21) (0.42)
Age 0.031* 0.030 0.003
(2.36) (1.74)
Age squared -0.000* -0.000 -0.000
(2.31) (1.51)
Married or cohabiting 0.004 -0.010 -0.001
(0.09) (0.16)
Separated or divorced 0.225** 0.286** 0.037
(3.14) (3.15)
Widow 0.157 0.229 0.029
(1.22) (1.47)
Chronic illness 0.467** 0.465** 0.066
(10.20) (8.17)
Number of children aged 0.027 0.029 0.003
less than 15 (1.06) (0.92)
High school education -0.058 -0.100 -0.011
(1.33) (1.81)
University degree or -0.117 -0.330** -0.029
post-graduate (1.77) (3.45)
Living in the South 0.159** 0.093 0.010
(3.88) (1.84)
Employed in firms with 0.064 0.060 0.006
50 or more employees (1.67) (1.23)
Part-time 0.077 0.025 0.003
(1.39) (0.38)
Temporary 0.118* 0.164** 0.019
(2.30) (2.69)
Log equiv.hous. -0.241** -0.351** -0.037
(5.55) (6.85)
Constant 0.182 0.818
(0.35) (1.30)
Industry, firm size and job positions dummies included

Observations 14,844 14,844
Wald test of rho = 0
Chi2 198.583
Prob [ chi2 0.0000
a bivariate Probit model controlling for personal, household and type of job
variables, where the error terms are assumed to be correlated with a cumulative
bivariate normal distribution.
As the results in Table 4.5 show, being in a temporary position increases the
probability of facing unmet needs when controlling for equivalised household
income, health status, type of employment and industry and other individual and
family structure variables. This can be connected to the higher uncertainty in the
job income of workers in temporary employment, and brings to light another weak
element in the sustainability of this type of contract in terms of employees’ well-
being.
4.7 Conclusions
The diffusion of non-standard work in Italy and the observed gender differences in
their distribution suggested that attention should be devoted to the factors affecting
labour supply in these positions, with special attention to the probability of people
being employed in non-standard work involuntarily. Our analysis has also con-
firmed, in the Italian case, the higher probability for workers in non-standard posts
to be female. Among employed people 16–64 years old, 21% of women are in
part-time jobs against 4% of men; moreover, the overall percentage of women in
temporary jobs (21%) is higher than the proportion of men in the same type of
job (15%).
Our findings highlight the way Italian women and men differ in their reasons for
accepting non-standard work. Voluntary choice and family factors are the most
common reasons among women living in the North. However, in both the North
and the South, the highest incidence of working part-time for family reasons is
encountered among females between 25 and 44 years old; this contrasts with the
maximum incidence of part-time work for family reasons in Central Italy, which is
with females 35–44 years old. Individual, family, institutional and labour demand
factors are regarded as accounting for this take-up of part-time work.
Controlling for individual, demand-side and family variables, and estimating
different models by gender, allow us to detect different factors affecting the
employment probability of men and women in temporary and part-time employ-
ment. With reference to part-time employment the estimates confirm the high
weight of family structure variables affecting women in relation to part-time work
(the high inequality in the distribution of unpaid work by gender is also mirrored in
this result). Meanwhile, involuntary part-time work turns out to be more likely to
occur for women, for less well-educated individuals, and for people living in the
South.
We then turned to the evaluation of costs connected to the observed non-
standard jobs. On average an hourly pay penalty is attached to temporary work
both for men and for women, while for part-time work this penalty operates for
women only. Part-time and temporary work are negatively related to the proba-
bility of holding supervisory positions, after the analysis has controlled for indi-
vidual characteristics, family composition and industry. After these financial costs
an attempt to extend the analysis to other dimensions of well-being, namely access
to medical and dental assessment and treatments, shows a higher probability of

temporary workers having unmet needs, related to affordability. The latter is
probably connected to higher income uncertainty for temporary employees, and
can magnify the cost of holding a temporary job by affecting health outcomes.
In terms of policy proposals, we suggest that more attention should be paid to
monitoring and improving the quality of non-standard jobs—in which women are
over-represented—in a manner consistent with the achievement of gender equality
goals (Burchell et al. 2007). This in turn could lead (as found in Del Boca et al.
2009, with reference to good quality part-time work) to an increase of female
employment.
Appendix
See Tables A1, A2, A3, A4, A5 and A6
Table A1 Involuntary part-time work by age groups, sex and area

Age M (%) F (%) F–M (%) M (%) F (%) F–M (%) M (%) F (%) F–M (%)
16–24 9 25 17 0 55 55 43 28 -15
25–34 16 19 3 40 29 -11 45 27 -18
35–44 7 12 5 10 24 13 24 28 4
45–54 11 17 6 32 29 -3 19 47 28
55–64 10 15 5 19 26 7 24 50 26
16–64 12 16 4 22 30 8 33 32 -1
Table A2 Part-timers who work less than 30 h by reason, sex and area
North Centre South
M F Gap M F Gap M F Gap
Education 2.31 1.59 -0.72 3.59 0.69 -2.9 2.23 1.94 -0.29
Illness 13.85 2.65 -11.2 6.6 1.22 -5.38 2.07 0.87 -1.2
Underemployment 24.88 21.83 -3.05 45.9 39.8 -6.1 75.01 44.71 30.3
Voluntary 9.73 19.92 10.19 8.6 13.33 4.73 5.48 9.81 4.33
Considered fit 18.33 7.88 -10.45 17.96 9.79 -8.17 5.73 13.9 8.17
Housework or care 3.02 28.73 25.71 0.88 19.48 18.6 0 16.69 16.69
Other reasons 27.89 17.39 -10.5 16.46 15.69 -0.77 9.47 12.08 2.61
Table A3 Supervisory role M (%) F (%) Gap (%)

by type of contract (PT-FT,
permanent-temporary) Full-time 28 19 -9
Part-time 11 11 0
PT-FT -17 -8
Permanent 30 18 -12
Temporary 8 6 -2
Temp-Perm -22 -12
Table A4 Gross wage differentials

M F Gross Gender Wage Gap9 (%)
FT 11.04 10.83 2
PT 9.29 8.89 4
Gross wage gap 16% 18%
Permanent 11.33 10.76 5
Temporary 7.94 8.38 -6
Gross wage gap 30% 22%
Table A5 Log gross hourly wage equations by gender

Women Men
Wage (logarithm) Probability of Wage
empl. (logarithm)
Actual past work-experience 0.112** 0.114**
(18.34) (15.54)
Part-time -0.094** -0.044
(6.80) (1.30)
Temporary -0.150** -0.148**
(12.16) (9.24)
Married cohabiting 0.080** -0.320** 0.112**
(7.80) (12.70) (8.74)
Separated divorced 0.047** -0.416** 0.112**
(2.72) (10.51) (5.34)
Widow 0.036 -0.853** 0.158*
(1.04) (10.85) (2.26)
Number of children aged less than 15 0.030** -0.036** 0.025**
(5.32) (2.65) (3.61)
High school education 0.101** 0.462** 0.108**
(10.96) (22.77) (10.83)
University degree or post-graduate 0.357** 0.950** 0.414**
(22.27) (33.51) (19.32)
South -0.087** -0.892** -0.132**
(7.90) (43.77) (11.46)
Firms with more than 49 employees 0.106** 0.095**
(12.86) (8.82)
(continued)
9
Gender Gap in wages is defined as [1- (woman’s wage/man’s wage)] specific to each type of
job. The table shows also gross wage gap by type of jobs (part-time versus full-time and
permanent versus temporary). The sample is made of employees not working in agriculture and
working more than 9 h a week.
Table A5 (continued)
Women Men
Wage (logarithm) Probability of Wage
empl. (logarithm)
Dummies on industry and type of Included Included
employment
Age 0.226**
(42.35)
Age squared -0.003**
(35.76)
Chronic illness -0.298**
(11.10)
Other household income -0.357**
(40.02)
Constant 1.784** 1.782**
(73.89) (62.71)
Observations 19,144 19,144 8,211
Lambda -0.0562273
Wald test of indep. eqns.
Chi2(1) 9.65
Prob [ chi2 0.0019
Table A6 Unmet needs for medical or dental examinations or treatments and reasons connected
to their costs: means and standard dev
Type of Men Women
contract
Unmet needs for Of which Unmet needs for Of which
medical or dental unmet because medical or dental unmet because
examinations not affordable examinations not affordable
Non temporary 0.12 0.52 0.13 0.51
0.33 0.50 0.34 0.50
Temporary 0.17 0.69 0.18 0.58
0.38 0.46 0.39 0.49
Full-time 0.12 0.53 0.12 0.47
0.33 0.50 0.33 0.50
Part-time 0.19 0.45 0.15 0.54
0.40 0.50 0.36 0.50
Employees 0.13 0.52 0.13 0.48
0.33 0.50 0.34 0.50
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Part II
Non-Standard Employment, Workers’
Mobility and Labour Market Structure
Chapter 5
The Quality of Temporary Work
Gianna Barbieri and Paolo Sestito
5.1 Introduction
Temporary work has been an important component of employment growth in Italy

since the early 1990s.1 This is not surprising as Italy has substantially removed the
obstacles against the use of temporary workers (henceforth ‘temps’ for brevity),
while maintaining the rather strict firing regulations applying to permanent ones.2
Whatever its origins, this dual structure has become increasingly controversial. The
nature of temporary work, either as a stepping stone or as a dead end, remains unclear,
and the ‘quality’ of temporary jobs is increasingly scrutinised by worried observers
(see OECD 2002). Besides equity considerations, efficiency issues have also been
raised, because temps may become trapped in a low-productivity market segment.
To a large extent, such an examination requires analysis of the transitions into
and out of temporary employment. We have conducted such analysis in a related
paper by evaluating the impact of escaping unemployment through a temporary
work experience on the subsequent work chances (Barbieri and Sestito 2008). That
1
The opinions expressed here are those of the authors alone and do not necessarily reflect those
of the institutions to which they belong.
2
While such a route has been quite commonly pursued, Italy appears to be an extreme case
which warrants specific examination. According to the OECD (see OECD 2004), Italy is the
country recording the largest drop in the Employment Protection Legislation (EPL) subindex for
temporary employment since the early 1990s.
G. Barbieri (&)
Ministry of Education, Statistical Unit, Via Michele Carcani, 61, 00153 Rome, Italy
e-mail: gianna.barbieri@istruzione.it
P. Sestito (&)
Deputy Director Department for Structural Economic Analysis, Bank of Italy, Banca
d’Italia, Via Nazionale, 91, 00184 Rome, Italy
e-mail: paolo.sestito@bancaditalia.it

80 G. Barbieri and P. Sestito
paper focused on the decade-long rise in temporary employment since the early
1990s. In this paper, we restrict our effort to assembling a few indicators for the
‘quality’ of temporary employment. But we focus on the 2004–2006 period. In so
doing we are able to draw on the latest waves of the Labour Force Survey (LFS),
which are much richer and more precise in identifying temporary employment and
the reasons for it. Although limited, this period is also important because of the
further steps in ‘flexibilization’ of the Italian labour market associated with the
hotly debated Biagi Law.3
Section 5.2 discusses both the Italian institutional set-up and the features of the
LFS data, comparing the newest data with those furnished by the previous LFS
editions and with the available administrative sources. Its aim is to clarify the
counting of temporary employment in Italy, which is an area of much controversy.
Section 5.3 presents a simple econometric accounting of the determinants of being
a temp, comparing the results for 2004 and 2006. Section 5.4 summarizes the
evidence on several indicators of job ‘quality’. The approach followed is highly
empirical and aims at presenting broad evidence with which to disentangle whe-
ther temporary status in itself is related to certain qualitative features and whether
the link has changed over time. The results are summarised in Sect. 5.5.
5.2 Contractual Arrangements and Measurement Issues
Besides being controversial in itself, temporary employment has given rise to

numerous measurement controversies. The shorter duration of temporary contracts
implies that the incidence of temporary employment differs according to the use of
either flow or stock measures. Moreover, until recently the statistical use of
administrative data was underdeveloped and there was no precise mapping
between legal concepts—the fact that a work contract has a termination clause,
formally an exception possible only in certain circumstances in the Italian juridical
framework—and the available statistical measures. These were mostly based upon
the classification of employees provided by the LFS, in which the worker was
asked about the presence of a termination date (or clause) in his/her work contract.
Building upon the respondent’s perception may be an advantage because one
cuts across the formal details of the many functional substitutes provided for by the
legislation. On the other hand, there is no precise mapping from the LFS to formal
contractual arrangements. Moreover, the replies by the respondent (who may be
the worker or a proxy respondent) may be rather imprecise because s/he may be
uninformed about many legal aspects of the work contract.4
3
For more details see Sestito (2004) and Pirrone and Sestito (2006).
4
These ambiguities are reflected in the study by Tronti et al. (2003). A more precise comparison
between LFS and administrative sources is provided by Anastasia et al. (2004) and by the
Ministry of Labour Monitoring Reports, particularly the July 2006 issue, upon which much of this
section is based Ministry of Labour (2006).
5 The Quality of Temporary Work 81
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
1998 1999 2000 2001 2002 2003 2004 2005
CLAP LFS new LFS reconstruction of LFS
Fig. 5.1 Temporary employment in the non-farm private sector—Survey and administrative data
comparison. Source: our calculations on Istat and Ministry of Labour-Inps (National Institute for
Social Security), CLAP data
Particularly until 2003, the breakdown provided by the LFS was rather
imprecise.5 It also appears that the LFS was underestimating the total number of
people formally employed with temporary arrangements according to adminis-
trative sources (Fig. 5.1).6 Since 2004, the adoption of a new frame in the LFS—
the frame hereafter used in this paper—appears to have eliminated the problem,
even if there is still no precise mapping between the breakdown of temporary
employment in the LFS and the contractual arrangements allowed by the law.
5
It was based upon a single question investigating whether the temporary status was due to the
fact that ‘‘the contract was covering a period of training (apprenticeship, research assistant, youth
training)’’, ‘‘the person could not find a permanent job’’, ‘‘the person did not want a permanent
job’’ or ‘‘the contract was covering a probationary period’’ (with a last item covering the cases in
which no specific reason was provided by the respondent). Since 2004, involuntariness—defined
as the fact that the temporary work was taken because of the lack of alternatives—has been
investigated separately from the contractual arrangements breakdown.
6
The comparison was made using the CLAP (Campione Longitudinale Attivi e Pensionati)
archives, which were available only until 2002. As these archives focus on the non-farm private
sector, we excluded agriculture and the public sector from the LFS count as well. Because the
new LFS series for the years before 2004 have been reconstructed only for the overall economy
total, that aggregate reconstruction has been scaled back in order to purge from these two broad
sectors. Besides the differences in the average level, to be noted is that the administrative count
shows wider seasonal fluctuations. A possible reason for this is that the LFS survey considers the
persons employed in a reference week (actually, until 2003 just 1 week per quarter was
considered, while since 2004 the quarterly amount has been the average of all the
quarter’s weeks), while the CLAP concept measures the number of people working at least
once in a month.
Table 5.1 Temporary employment—the contractual arrangements breakdown in the private

non-farm sector
1998 1999 2000 2001 2002
A. People in work at least once during the month—(average of monthly stocks)
Apprenticeships 336,796 407,042 468,826 491,412 404,848
Training and work contracts 350,924 331,929 267,095 251,273 183,808
Temporary agency work 2,313 29,670 68,182 105,846 90,978
Other temporary contracts 349,832 387,520 499,129 523,646 467,049
Total 1,039,866 1,156,162 1,303,232 1,372,177 1,146,683
Temporary as share of total employees 11.7 12.5 13.1 13.3 13.1
(%)
B. Total yearly inflows
Apprenticeships 402,843 419,748 457,325 436,738 371,717
Training and work contracts 282,249 269,097 210,478 215,414 135,408
Temporary agency work 10,683 108,119 217,791 312,196 277,312
Other temporary contracts 668,018 834,668 1,014,563 1,035,671 997,572
Total 1,363,792 1,631,632 1,900,156 2,000,018 1,782,008
Temporary as share of total employees 31.8 34.5 35.9 37.9 37.8
(%)
Source: our calculations on Ministry of Labour-Inps, CLAP data
Focusing on the administrative data, Table 5.1 shows the breakdown among the
different contractual arrangements which make up temporary employment. To be
noted is the large difference that arises in the counting of temporary employment
when one moves from a stock concept (the number of persons with temporary
contracts at a given date) to a flow measure.
On turning to more recent data, we must revert to the LFS count, which, as said,
is more precise because of the new frame introduced in 2004. While in the next
sections we will exploit the information on the individual worker and the job
position in order to determine who temporary workers are and the ‘quality’ of their
jobs, here we give a breakdown of temporary employment according to the
duration and the nature of the work contract.
Starting with the former, Table 5.2 shows that only one out of five ongoing
contracts is expected to last more than 1 year (longer durations are for youths,
males, and residents in the Northern regions). Note that the incidence of temporary
workers who are involuntarily such—defined as those who take a temporary
position because of the lack of alternatives, an indicator further analysed in
Sect. 5.4—is not closely related to the expected duration. Indeed, involuntariness
is minimum (but still above 75%) for those contracts whose duration is unknown, a
situation which in principle can be considered one of high uncertainty.
The same Table also shows that about 30% of temporary workers declare that
their engagement with the current employer has already lasted more than 3 years.
The length of the elapsed tenure should not be taken at its face value; and more
specifically, it is likely that this group also includes multiple job spells (with the
same employer) intervalled by episodes of joblessness. Quite strikingly,
Table 5.2 Expected further duration of ongoing temporary work experiences—2006 average
Expected further duration Share of
temps with
tenure
longer than
3 years
Age \1 month 2–6 months 7–12 months [12 months Unknown (000) %
of
total
15–24 5.8 25.1 18.0 42.3 8.7 69 12.8
25–34 5.9 33.0 36.1 18.4 6.7 170 22.5
35–54 6.3 34.8 42.3 10.0 6.5 331 40.0
55–64 4.9 40.0 32.9 12.2 10.0 49 54.0
65 e + 7.7 19.0 38.0 22.7 12.6 5 57.9
Centre- Males 5.5 31.3 30.8 27.5 4.9 129 20.6
North
Females 5.8 26.8 41.4 21.9 4.2 203 27.4
Total 5.7 28.8 36.5 24.5 4.5 332 24.3
South Males 7.4 39.0 23.3 16.9 13.5 150 32.4
Females 5.5 34.7 37.3 12.8 9.6 145 36.8
Total 6.5 37.0 29.7 15.0 11.7 294 34.4
Italy Males 6.3 34.5 27.6 23.0 8.5 279 25.6
Females 5.7 29.5 40.0 18.8 6.1 348 30.7
Total 6.0 32.0 33.9 20.8 7.3 627 28.2
% workers 80.7 81.5 83.7 82.8 79.1 78.9
involuntarily
with a
temporary
status
the involuntariness indicator is slightly lower than average (78.9% vis-à-vis

82.3%) in this group, which is apparently the one closest to a situation of abuse of
the temporary clauses by the employer.
Tables 5.3 and 5.4 set out the types of work and contractual arrangements. As
already said, the identification of contractual arrangements is very imprecise even
in the LFS frame adopted since 2004. The incidence of apprenticeship contracts, in
particular, appears to be somewhat underestimated. More generally, there are
many cases in which the respondent (either the worker or a proxy respondent) is
either unable to specify the contractual arrangement or declares that there is only a
verbal understanding on the employment relationship (and its temporary nature),
something which should not be possible according to the law. As for the types of
work, seasonal jobs appear to be the most common, particularly among adults and
in the South. These are the jobs with the lowest incidence of involuntariness, while
training-related spells—more widespread among youths and in the North—are
characterised by an higher incidence of involuntariness.
Table 5.3 Typology of temporary contracts (% of total temporary employment)—2006 average

Age Training Probationary Seasonal Occasional Project Temporarily Others
period work job related vacant job
position
15–24 47.4 9.6 11.1 12.4 5.0 3.9 10.5
25–34 14.3 10.4 15.7 19.3 12.7 11.9 15.5
35–54 1.8 6.7 26.6 20.5 11.2 15.7 17.5
55–64 0.4 3.5 39.1 21.1 12.1 8.0 15.7
65 e + 0.0 0.0 26.4 15.1 27.9 4.6 26.0
Centre- Males 26.6 13.6 11.3 14.5 10.5 6.9 16.6
North
Females 17.1 8.8 13.1 19.7 9.6 16.9 14.8
Total 21.5 11.0 12.3 17.3 10.0 12.3 15.6
South Males 11.3 5.5 31.7 18.6 11.4 5.2 16.1
Females 8.2 3.3 31.3 20.6 10.2 14.3 12.1
Total 9.9 4.5 31.5 19.5 10.9 9.4 14.3
Italy Males 20.1 10.2 19.9 16.2 10.9 6.2 16.4
Females 14.0 6.9 19.4 20.0 9.8 16.0 13.9
Total 17.0 8.5 19.7 18.1 10.3 11.2 15.1
% workers 85.0 88.1 72.4 85.0 81.9 89.4 80.7
involuntarily
with a
temporary
status
5.3 Who are Temporary Employees?
Using the LFS count—more precisely, using the reconstruction of temporary (and total)
employment coherent with the new LFS frame provided by Istat—Fig. 5.2 depicts the
evolution of temporary employment since the early 1990s. It is apparent that the growth
of temporary employment in the 2004–06 period, the one under scrutiny here, has
deeper roots. Moreover, the most recent acceleration in the growth of temporary
employment may be related to cyclical factors, because temporary employment usually
tends to anticipate cyclical upswings in the economy (Figs. 5.3 and 5.4).
Bearing this longer-run evolution in mind, in what follows we focus on the
2004–2006 period and analyse who temporary workers are. More specifically, we
report estimates of a probit model for the probability of being a temp (con-
ditionally upon being an employee), replicating the same specification for the 2004
and 2006 quarter surveys.7 Our specification included demographical variables:
7
We selected the II quarter surveys because they are the least affected by seasonal factors. To be
noted is that temporary employment is strongly seasonal, more so than total employment, with a
peak in the summer. We focused on the probability of being a temporary worker (conditional
upon being an employee), but a similar broad pattern would emerge on treating temporary
workers as a share of the working age population.
Table 5.4 Typology of contractual arrangements (% of total temporary employment)—2006

average
Age Training Apprenticeship Temporary Contract Other and Unknown
and work according through a verbal
contracts to a job agreement
collective placement
contract agency
15–24 9.4 34.2 34.9 2.6 5.8 13.1
25–34 5.0 6.5 65.7 3.3 9.4 10.0
35–54 1.5 0.2 76.8 2.4 8.7 10.3
55–64 0.5 0.0 73.5 1.7 10.2 14.0
65 e + 0.0 0.0 59.5 1.1 20.7 18.8
Total 4.6 10.6 62.7 2.7 8.4 11.0
Centre- Males 26.6 13.6 11.3 14.5 10.5 6.9
North
Females 17.1 8.8 13.1 19.7 9.6 16.9
Total 12.2 6.2 7.0 9.8 5.7 40.9
South Males 11.3 5.5 31.7 18.6 11.4 5.2
Females 8.2 3.3 31.3 20.6 10.2 14.3
Total 5.7 2.6 18.1 11.2 6.2 43.7
Italy Males 18.0 9.1 28.4 14.5 9.7 5.5
Females 12.4 6.1 28.8 17.6 8.7 14.1
Total 9.7 4.8 11.2 10.3 5.9 42.0
% workers 87.1 83.5 82.5 90.1 78.9 78.7
involuntarily
with a
temporary
status
Source: our calculations on Istat data
Age (a set of dummies covering four age groups: \25, 25–34, 35–54, [54),
Marital status (a set of dummies if an individual is single, married, widowed or
divorced), Gender, Education (a set of dummies distinguishing among four edu-
cation levels: primary, lower-secondary, upper-secondary and tertiary). We also
included a dummy for the status of Student and a dummy variable marking the
school-to-work transition phase (equal to one for those people who had exited
from the education system during the last 5 years). We also controlled for the local
labour market context by using a set of geographical dummies (AREA, distin-
guishing among North–West, North–East, Centre and South) and the provincial
Unemployment rate.8 Conditioning upon being an employee, we also made use of
some job-related covariates: Occupation (a set of dummies distinguishing among
8
We dropped a quadratic in the rate of employment growth at provincial level, because this
variable—used in Barbieri and Sestito (2008) in order to take account of the complex cyclical
behaviour of temporary employment—is not very reliable in year 2004 owing to the break in the
LFS.
10.5 2400
10.0
2200
9.5
2000
9.0
8.5 1800
8.0 1600
7.5
1400
7.0
1200
6.5
6.0 1000
ct 0
ct 1
ct 2
ct 3
ct 4
ct 5
ct 6
r 0
r 1
r 2
r 3
r 4
r 5
06
O -93
O -95
O -94
O -96
O -98
O -97
O -99
Ap -92
Ap -93
Ap -94
Ap -95
Ap -96
Ap -97
Ap -98
Ap t-99
O -10
O -10
O -10
O -10
O -10
O -10
O -10
Ap -10
Ap -10
Ap -10
Ap -10
Ap -10
Ap -10
-1
r
r
r
r
ct
ct
ct
ct
ct
ct
ct
c
r
O
% of total employment absolute value (right axis)
Fig. 5.2 Temporary employment—data coherent with the new LFS frame. Source: our
elaborations on Istat data
80 8000
60
6000
40
4000
20
0 2000
O 3
O 4
O 5
O 6
O 7
O 98
O 99
O 00
O 01
O 02
O 03
O 4
O 5
O 6
Ap 92
Ap 93
Ap 94
Ap 95
Ap 96
Ap 97
Ap 98
Ap 99
Ap 00
Ap 01
Ap 02
Ap 03
Ap 04
Ap 05
6
r-9
r-9
r-9
r-9
r-9
r-0
r-0
r-0
-0
r-
r-
r-
r-
r-
r-
-
-
ct
ct
ct
ct
ct
ct
ct
ct
ct
ct
ct
ct
ct
ct
ct
-20
O
-40
-2000
-60
-4000
-80
-100 -6000
Temporary employment GDP
Fig. 5.3 Cyclical components of temporary employment and GDP. Source: our calculations on
Istat data
legislators and managers, professionals, technicians and clerical workers, services

and sales workers, craft and related workers, plant/machine operators, elementary
occupations, armed forces) and Industry (a set of dummies for industry excluding
construction, trade, private services, public administration, agriculture).
0.8
0.6
0.4
0.2
0
-8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8
-0.2
-0.4
Fig. 5.4 Co-movements of detrended temporary employment (quarter t) and GDP (at various
leads and lags). Source: our calculations on Istat data
The results do not change greatly between the 2 years. According to a standard
Blinder–Oaxaca decomposition,9 the 1% point rise in the temps’ share between
2004 and 2006 is almost exclusively explained by the differences in coefficients.
However, the only sizable difference is that in the constant, capturing an across-
the-board rise in the probability of being a temp.
Note that a similar across-the-board rise also emerges if one compares the
provincial dummies across the 2 years in a specification where these dummies
(interacted with a year dummy) substitute for the area dummies and the provincial
unemployment rate. The differences across provinces (as estimated by the province
dummies and thus controlling for the covariates shown in Table 5.5) are rather
stable over time (Fig. 5.5). If anything, the provinces exhibiting the largest
increase in the incidence of temporary employment are those with the worse
unemployment performances: the effect is, however, not precisely estimated. Both
the area dummies and the more detailed provincial dummies show that an
employee’s probability of being temporary is greatest in the high unemployment
9
The Blinder–Oaxaca decomposition identifies an explained and an unexplained component, the
former being defined in terms of differences in the values of the covariates, while the latter is
associated with differences in the coefficients associated with those covariates (including the
constant). In order to handle a non-linear model, we employed the methodology proposed by Yun
(2004). The difference
h in probabilitiesi (Y)h between 2006 (A) andi 2004 (B) can be decomposed as
: Y A Y B ¼ /ðXA bA Þ /ðXB bA Þ þ /ðXB bA Þ /ðXB bB Þ : In order to obtain proper
weights, two approximations are used: the first, an approximation of the value of the average
of the function, /ðXbÞ; with that of the function evaluated at the average value of the
exogenous variables /ðXbÞ; the second, a first order Taylor expansion to linearize the
characteristics and coefficients effects around X A bA and X B bB ; respectively.
Table 5.5 Probit estimates of the determinants for an employee being temporary
88
2004 2006
Coef. Std. Err. P[z Coef. Std. Err. P[z
Gender Male -0.270 0.017 0.000 -0.273 0.017 0.000
Marital status Married -0.184 0.021 0.000 -0.167 0.020 0.000
Separated, divorced, widowed -0.153 0.036 0.000 -0.103 0.034 0.002
Student 0.298 0.038 0.000 0.236 0.040 0.000
Age 25–34 -0.550 0.026 0.000 -0.528 0.028 0.000
35–54 -0.902 0.030 0.000 -0.868 0.032 0.000
[54 -1.135 0.042 0.000 -1.182 0.042 0.000
Education Lower secondary -0.136 0.030 0.000 -0.171 0.030 0.000
Upper secondary -0.153 0.032 0.000 -0.192 0.032 0.000
Tertiary -0.074 0.044 0.091 -0.098 0.043 0.022
School-to-work 0.507 0.038 0.000 0.482 0.445 0.028
transition period
Sector Industry excluding construction -0.564 0.035 0.000 -0.620 0.034 0.000
Construction -0.530 0.040 0.000 -0.584 0.040 0.000
Trade -0.793 0.040 0.000 -0.807 0.038 0.000
Private services -0.474 0.036 0.000 -0.558 0.035 0.000
Public administration -0.275 0.035 0.000 -0.375 0.034 0.000
Occupation Professionals 0.142 0.080 0.076 0.133 0.078 0.088
Technicians and clerical workers 0.117 0.078 0.131 0.175 0.075 0.019
Services and sales workers 0.276 0.079 0.001 0.366 0.076 0.000
Craft and related workers, 0.218 0.079 0.005 0.289 0.075 0.000
plant/machine operators
Elementary occupations 0.731 0.079 0.000 0.843 0.076 0.000
Armed forces -0.237 0.119 0.046 0.043 0.107 0.690
(continued)
G. Barbieri and P. Sestito
2004 2006
Area North–East 0.085 0.023 0.000 0.097 0.023 0.000
Centre 0.153 0.025 0.000 0.186 0.025 0.000
South 0.158 0.035 0.000 0.276 0.035 0.000
Provincial unemployment rate 1.105 0.221 0.000 0.521 0.480 0.290
Constant -0.286 0.092 0.002 -0.219 0.090 0.016
Pseudo R2 0.138 0.153
N. obs. 61,254 61,155
Chi Test (26) for the equality of all 39.46 0.044
5 The Quality of Temporary Work
coefficientsapart from a year

dummy on the constant
Pooled model Dummy year (in a model with all 0.0713 0.0112 0.000
other coefficients constant over
time)
Baseline category: gender: female; marital status: single; age: \25; educational level: primary school; sector: agriculture; occupation: legislators and
managers; area: North–West
89
Fig. 5.5 Probability of being 2004

temporarily employed:
differences across provinces
(net of the impact of the other
covariates in Table. 5.5)
provincial dummies
(-0.31,0.09)
(0.09,0.20)
(0.20,0.36)
(0.36,0.87)
2006
provincial dummies
(-0.40,0.04)
(0.04,0.22)
(0.22,0.37)
(0.37,0.73)
Mezzogiorno area (and the provincial unemployment rate, when considered instead
of a set of province dummies, has a positive impact on the incidence of
temporariness).
As for the other effects, according to the estimates reported in Table 5.5, the
probability of an employee being temporary diminishes (although not monotoni-
cally) with age and educational attainment, being highest for females, students,
and during the school-to-work transition period. Temporary employment is most
important in agriculture and in low-skilled occupations.
We can summarise our results by stressing that temporary employment is over-
represented among weak groups of workers and in more menial industries and
occupations. Over time, there has been a sizable rise in the incidence of temporary
employment, and it has mostly occurred across the board. Although cyclical
factors are likely to have played a role as well, we are not able to disentangle their
contribution to the 2004–2006 change.
5.4 The ‘Quality’ of Temporary Jobs
The concerns induced by the rise in temporary employment stem from the idea that
temporary jobs may be bad jobs. The quality of a given job is intrinsically difficult
to define. It is difficult to say above what threshold a job is a ‘good’ one. Even
using the simplest metric—the wage—and fixing a given threshold, it is difficult to
determine whether a given worker in a given job is in a bad position. Doubtless a
better wage would make that person better off. However, given his/her actual
capabilities and market chances, that job may be better than remaining unem-
ployed. While recognizing these ambiguities, here we adopt the standard practice
of considering whether temporary positions are associated with certain qualitative
features (see for instance the special chapter in OECD 2002). The estimates are not
intended to identify the impact of being temporary on those job features. Besides
controlling for as many covariates as possible, in order to take into account that
temps may differ from permanent ones and that well-known factors may explain
those features, we do not attempt any structural interpretation.
The qualitative features considered are those which can be captured within the LFS
(2004, 2006), which comprises neither wage data nor summary job satisfaction
measures.10 Before looking at the association between temporariness and those
quality features, we consider the origin of the temporary status as evaluated from
the worker’s perspective. More specifically, we focus on the involuntariness of the
temporary status as identified by the fact that the worker states that s/he accepted
that job because of the lack of suitable alternatives. As such, this is a first summary
qualitative judgement on the temporary position. Note that there is some ambiguity
10
The latter have been examined in Sestito (2002), Chapt. 7 using the SHIW data produced by
the Bank of Italy. The results show that jobs which are ‘‘discontinuous over the year’’, a concept
related to but different from the temporariness here considered, are associated with an higher
perceived risk of unemployment, but also, albeit less intensively, with more ‘‘consideration by
other people’’. The summary measure of job satisfaction is entirely unrelated to the discontinuous
features of the job itself. The results were obtained in a specification with controls for earnings.
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
O -94
Ap -92
O -93
Ap 94
O -95
O -96
O -97
O -98
Ap -01
O -02
O -03
O -04
Ap -93
Ap -95
Ap -96
Ap -97
Ap -98
O -99
Ap -99
O -00
Ap -00
O -01
Ap -04
O -05
Ap -02
Ap -03
Ap -05
O -06
6
-0
-
r
ct
r
ct
r
ct
r
ct
r
r
ct
r
r
r
ct
r
r
ct
ct
ct
ct
r
ct
r
ct
ct
ct
ct
O
% of involuntary temporary empl.
Fig. 5.6 Share of involuntarily temporary workers. Source: our calculations on Istat data
in the question, because ceteris paribus the worker should gain nothing from the
temporary nature of the contract; indeed, permanent status does not restrict the
worker’s chances of leaving the firm, so that the lack of a permanent status, i.e. a
temporary status, only creates additional uncertainties about work prospects
beyond the contract’s expiry date (for the firm, by contrast, there is a costless
opportunity to terminate the contract at the expiry date unilaterally, while termi-
nating it before the expiry date may be quite costly). Hence it is unclear why
temporary status per se should be voluntarily accepted by the worker. Our inter-
pretation is that those respondents who declared that they did not want a perma-
nent contract (the complement to one of those termed ‘involuntarily temps’)
appreciated other specific features of their ongoing contract: for instance, the fact
that they were employed only during a given season. The ambiguity is, however,
that there may have been some respondents who appreciated the overall package
of their ongoing temporary work but, quite understandably they did not like the
temporary clause as such, and consequently stated that they accepted it for the lack
of alternatives. So the involuntariness indicator may not be taken at face value,
representing only a proxy of the underlying unsatisfactoriness of the ongoing
work.
Whatever the interpretation problems related to the current formulation of the
LFS may be, it should be pointed out that the formulation adopted until 2003 was
even more problematic because it mixed this feature with (some of) the details on
the contractual temporary arrangements (see Sect. 5.2). Hence, whilst the current
data may overestimate the incidence of temporary workers unsatisfied by their
ongoing work experience, the previous data clearly underestimated it. Indeed,
Fig. 5.6 documents the time break in the series before and after 2004.
Table 5.6 Probit estimates of the determinants of being involuntarily a temporary employee
2004 2006
Gender Male -0.030 0.049 0.548 0.006 0.048 0.900
Separated, divorced, -0.047 0.112 0.675 -0.040 0.104 0.702
widowed
Student -1.027 0.074 0.000 -0.856 0.075 0.000
Age 25–34 0.031 0.075 0.682 0.296 0.073 0.000
35–54 -0.145 0.091 0.110 0.118 0.087 0.173
[54 -0.611 0.124 0.000 -0.535 0.117 0.000
Education Lower secondary -0.046 0.086 0.595 0.119 0.083 0.155

Upper secondary -0.019 0.094 0.839 0.161 0.091 0.077
Tertiary 0.197 0.131 0.132 0.290 0.125 0.020
School-to-work transtion period -0.095 -0.037 0.074 0.613 0.013 0.071
Sector Industry excluding 0.392 0.097 0.000 0.472 0.098 0.000
construction
Construction 0.310 0.114 0.007 0.409 0.117 0.000
Trade 0.333 0.111 0.003 0.363 0.104 0.001
Private services 0.170 0.093 0.066 0.207 0.092 0.024
Public administration 0.439 0.091 0.000 0.299 0.088 0.001
Technicians and clerical 1.014 0.221 0.000 1.086 0.222 0.000
workers
Craft and related workers, 1.014 0.228 0.000 1.149 0.229 0.000
plant/machine operators
(continued)
93
94
2004 2006
Armed forces 0.431 0.333 0.196 0.602 0.286 0.036
Area North–East -0.253 0.064 0.000 -0.255 0.064 0.000
Centre 0.082 0.074 0.266 0.011 0.076 0.882
South 0.209 0.104 0.045 -0.244 0.104 0.019
Constant 0.012 0.268 0.963 -0.562 0.266 0.035
Pseudo R2 0.098 0.098
N. obs. 5,594 6,225
Chi Test (26) for the 39.05 0.0482
equality of all
coefficients apart from a
year dummy on the
constant
Pooled model Dummy year2006 (in a 0.0360 0.0187 0.005
model with all other
coefficients constant
over time)
Besides the difference in level, the pre-2004 data show a gently declining
incidence of involuntariness—indeed, involuntary temps were a minor component
of the overall positive trend for temporary contracts (see Barbieri and Sestito
2008)—while the data for the 2004–2006 period show an upward trend (the
incidence of involuntariness rises from 75% in 2004 to 82% in 2006).
Given the ambiguity of the question, it is rather difficult to understand the
reasons for this rise, which may simply reflect increased social alarm about job
precariousness (see Accornero 2006). Whatever the case may be, we again resort
to a regression frame in order to examine the behaviour of the involuntariness
indicator, controlling for compositional and contextual factors. The impact of the
latter is not so obvious. For instance, in a buoyant economy one might expect the
abundance of job offers to imply a decline in the involuntariness indicator because
people do not have to accept the first offer received; on the other hand, with people
having greater chances but also greater expectations, those ending up in a tem-
porary position may be people feeling particularly unlucky and disappointed,
while in bad times people may feel relatively happy when (at least) they find a
temporary position. More specifically, we estimated a probit model for the chance
of being involuntarily temporary (conditional upon being a temporary worker:
Table 5.6). The specification largely resembled that already reported in the pre-
vious section, and we again examined the II quarter cross sections of 2004 and
2006.
Broadly speaking, industry and occupation dummies are the most relevant
regressors: involuntariness is highest in the public sector and lowest in agriculture
and private services; involuntariness is lowest among managers and professionals,
but also among service workers. With the exception of the dummy for the oldest
age groups—people over 54 are least likely to be involuntary temps—the pattern
of the other covariates (for instance gender or education) is quite imprecisely
estimated. This is why the estimates are often unstable across the 2 years. Hence,
in order to examine the changes experienced over time we resorted to a pooled
model. The basic exercise, reported in the lowest part of Table 5.6, confirmed the
across-the-board increase in the incidence of involuntariness (while the changes in
the other coefficients are not significant).
Using a pooled model with a year dummy on the constant in order to take
account of this across-the-board rise, we further examined (see the results in
Table 5.7) the link between certain features of the ongoing work experience—
those already described in Sect. 5.2, more precisely in Tables 5.2, 5.3, 5.4—and
involuntariness. It appears that the incidence of involuntariness is highest for jobs
with some training content, those related to employment in temporarily vacant
positions, and those which involve probationary periods, while occasional and
seasonal jobs are the least likely to be characterised by involuntariness. By con-
trast, the contractual arrangements and the further expected duration of the
ongoing work have less weight.
Using the enriched formulation of Table 5.7 we experimented further by
introducing a set of provincial dummies (interacted with a year dummy). Clearly,
these absorbed the effect previously attributed to the unemployment rate and
Table 5.7 Probit estimates of the determinants of being involuntarily a temporary employee
(coefficients of expected further duration, typology of temporary contracts and contractual
arrangements)
Coef. Std. Err P[z
Expected further duration of temporary job
2–6 months -0.028 0.084 0.735
7–12 months -0.073 0.084 0.381
[12 months -0.079 0.092 0.394
Unknown -0.034 0.096 0.723
Type of temporary contract

Probationary period 0.109 0.096 0.254
Seasonal work -0.627 0.084 0.000
Occasional work -0.294 0.086 0.001
Project related -0.307 0.088 0.000
Temporarily vacant job position 0.108 0.097 0.268
Others -0.219 0.081 0.007
Type of contractual arrangement

Apprenticeship -0.168 0.085 0.049
Temporary according to a collective agreement -0.049 0.083 0.556
Contract through a job placement agency -0.047 0.090 0.606
Other and verbal agreement -0.117 0.110 0.288
Unknown -0.144 0.108 0.184
Baseline category: expected duration: \1 month; type of temp contract: Training; type of con-
tractual arrangement: Training and work contracts. The model was estimated over the pooled
sample and included all the covariates of Table 5.6 (with coefficients assumed to be constant over
time) and a year dummy
showed an higher incidence of involuntariness in the South. Two features should

be stressed. Firstly, it appears that the ranking of the provinces is quite stable
across the 2 years. While this stability resembles the stability already depicted for
the incidence of temporary employment as such (see previous section), there
appears to be no link between the ranking of the provinces for the two phenomena.
Neither the levels nor the changes over time in the incidence of involuntariness
and of temporariness as such are correlated to each other.
As said, we do not consider the involuntary indicator to be very informative.
Consequently, we examine two further indicators, which are somehow more
‘objective’ because they consider what is actually happening in the currently held
job. The first indicator refers to worker’s search-behaviour. It considers, inde-
pendently from the judgement on the currently held job, whether the worker is
looking for an alternative job.11 Its rationale is simply that looking for alternatives
11
More precisely, the indicator identifies who is looking for an alternative job, as opposed to
individuals not engaged in a search, or in a search motivated by the intention to find a second job
(on top of the one currently held).
Table 5.8 Probit estimates of being an employee looking for another job
2004 2006
Temporarily employed 0.538 0.024 0.000 0.401 0.024 0.000
Gender Male -0.074 0.019 0.000 -0.126 0.020 0.000
Separated, divorced, widowed 0.139 0.036 0.000 0.096 0.037 0.010
Student -0.009 0.046 0.848 0.094 0.049 0.052
Age 25–34 0.141 0.031 0.000 0.202 0.034 0.000
35–54 -0.023 0.035 0.503 0.038 0.039 0.331
[54 -0.542 0.053 0.000 -0.430 0.056 0.000
Education Lower secondary 0.001 0.034 0.986 -0.053 0.037 0.152

Upper secondary 0.062 0.036 0.082 -0.024 0.039 0.532
Tertiary 0.236 0.049 0.000 0.114 0.051 0.027
School-to-work transition period 0.156 0.044 0.000 0.112 0.037 0.002
Sector Industry excluding construction 0.130 0.045 0.004 0.189 0.048 0.000
Construction 0.211 0.049 0.000 0.186 0.053 0.000
Trade 0.143 0.048 0.003 0.210 0.050 0.000
Private 0.213 0.045 0.000 0.279 0.048 0.000
services
Technicians and clerical workers 0.351 0.100 0.000 0.304 0.100 0.002
Craft and related workers, plant/ 0.485 0.101 0.000 0.452 0.100 0.000
machine operators
Armed forces -0.812 0.264 0.002 -0.306 0.179 0.088
(continued)
97
98
2004 2006
Area North–East -0.072 0.027 0.007 -0.040 0.028 0.156
Centre 0.130 0.028 0.000 0.102 0.030 0.001
South 0.070 0.038 0.064 0.042 0.041 0.313
Tenure \ 2 years 0.337 0.020 0.000 0.413 0.021 0.000
Constant -2.471 0.118 0.000 -2.502 0.121 0.000
Pseudo R2 0.128 0.127
N. obs. 61,254 61,155
Chi Test (27) for the equality of all 40.49 0.0461
coefficients apart from a year
dummy on the constant and its
interaction with the temporary
dummy
Pooled model Temporary employment 0.523 0.023 0.000
Year2006*temp empl -0.107 0.031 0.001
Pooled model with province Temporary employment 0.666 0.023 0.000
dummies and all covariates
interacted with a year dummy
Year2006*temp empl -0.099 0.033 0.002
may be indicative of dissatisfaction with the current job. The other indicator
considers participation in education and training activities. Its rationale is simply
that life-long learning activities, often deemed to be essential in a knowledge-
based economy, may capture longer-run quality features of a job. Also for the two
‘objective’ indicators we consider a probit model which captured compositional
and context factors possibly impinging upon them. Besides the same factors
already included in the previous models, this one also included a dummy for
elapsed tenure, because tenure (which by definition is on average shorter for
temporary positions than for permanent ones) may have an impact upon both
phenomena. Shorter tenure jobs are those which have not yet passed through the
very initial trial period during which the worker decides whether s/he likes the
ongoing experience, while training and human capital investments may be sys-
tematically related to tenure (as newly-hired people may need some training, while
the expected duration of the job may provide an incentive to invest in training).12
Here the estimates were run over the entire employee population and the focus was
on the impact of a temporary dummy.
The results for the search-behaviour indicator are shown in Table 5.8, which in
regard to the temp dummy shows a positive and sizable coefficient. However, over
time, the impact of temporariness on the probability of looking for another job has
slightly (but significantly from a statistical point of view) declined. Also when a
set of province dummies13 were used (in a model in which these dummies as well
as the other covariates were fully interacted with a year dummy), the temporary
employment dummy was positively related to the search for an alternative job,
although its interaction with the year dummy showed a decline in its impact.
The results for training activities (Table 5.9) are interesting in themselves. Tra-
ditional human capital theory would predict that the worker finances general human
capital investments while the firm pays for the specific human capital. ‘Modern’
human capital theory has shown that also the firm may be ready to invest in general
human capital provided some labour market imperfections allow it to reap the
benefits of those investments.14 In such a situation, the firm may be less inclined to
invest in training temps because they are more likely to quit the firm. More broadly,
an increase in turnover rates due to a shift to the use of temporary workers would
enable firms to poach trained workers instead of training them. On the other hand, a
temporary worker, whose reference is the external labour market and not the internal
labour market of a given firm, may become more inclined to pay for training as
12
Unfortunately, we were not able to construct a provincial turnover rate like the one which we
had employed in Barbieri and Sestito (2008) as an additional control variable.
13
The province dummies absorbed the effect of the provincial unemployment rate. They also
captured the possible effect of the turnover rate neglected in the previous exercise. The same
applies to the similar exercise conducted for the training indicator in Table 5.9.
14
One of the first models of the ‘modern’ approach is Acemoglu and Pischke (1999). A
summing-up of the issues is in Bassanini et al. (2005).
Table 5.9 Probit estimates of training participation
100
2004 2006
Coef. Std. P[z Coef. Std. P[z
Err. Err.
Temporary employed 0.116 0.028 0.000 0.052 0.029 0.072
Gender Male 0.030 0.018 0.092 -0.002 0.019 0.917
Separated, divorced, widowed -0.033 0.038 0.379 -0.032 0.038 0.406
Age 25–34 -0.434 0.033 0.000 -0.429 0.035 0.000
35–54 -0.567 0.038 0.000 -0.533 0.040 0.000
[54 -0.792 0.049 0.000 -0.806 0.052 0.000
Education Lower secondary 0.382 0.065 0.000 0.209 0.066 0.002
Upper secondary 0.727 0.065 0.000 0.569 0.066 0.000
Tertiary 0.927 0.069 0.000 0.699 0.070 0.000
School-to-work transition period 0.112 0.100 0.031 0.001 0.127 0.030
Sector Industry excluding construction -0.095 0.062 0.127 -0.224 0.061 0.000
Construction -0.050 0.070 0.471 -0.234 0.070 0.001
Trade -0.009 0.065 0.887 -0.167 0.063 0.008
Private services 0.149 0.062 0.017 -0.012 0.060 0.845
Technicians and clerical workers -0.141 0.057 0.013 -0.182 0.055 0.001
Services and sales workers -0.258 0.060 0.000 -0.336 0.059 0.000
Craft and related workers, plant/machine operators -0.530 0.061 0.000 -0.556 0.060 0.000
Elementary occupations -0.513 0.067 0.000 -0.546 0.067 0.000
Armed forces -0.462 0.094 0.000 -0.570 0.098 0.000
(continued)
2004 2006
Coef. Std. P[z Coef. Std. P[z
Err. Err.
Area North–East 0.146 0.023 0.000 0.091 0.024 0.000
Centre 0.084 0.026 0.001 0.056 0.028 0.041
South -0.055 0.040 0.169 -0.033 0.042 0.437
Provincial unemployment rate -0.752 -0.359 0.266 0.177 -1.041 0.366
Tenure \2 years 0.002 0.023 0.930 0.039 0.024 0.103
Constant -1.503 0.108 0.000 -1.211 0.108 0.000
Pseudo R2 0.128 0.129
N. obs. 61,254 61,155

Chi Test (26) for the equality of all coefficient apart from 27.39 0.3891
a year dummy on the constant and its interaction with
the temporary dummy
Pooled model Temporary employment 0.033 0.035 0.335
Year2006*temp empl -0.074 0.048 0.123
Pooled model with province Temporary employment -0.001 0.035 0.986
dummies and all covariates
interacted with a year dummy
Year2006*temp empl -0.058 0.051 0.259
101
human capital becomes more marketable.15 The results show a strongly negative link
between training and age, and a strongly positive relationship with previous edu-
cational attainment. The effect of tenure is not precisely estimated, contrary to our
previous results over a different time span (see Barbieri and Sestito 2008): it is
possible that either some training activities are financed by the worker or that some
training is deemed necessary to integrate recently-hired workers into the firm’s
workforce. With respect to the temporary dummy, we observe a positive, albeit
slightly diminishing over time, coefficient. When experimenting with a model with
provincial dummies (and full interactions with a year dummy), the temporary work
dummy turned out to be statistically insignificant. This lack of precision was prob-
ably related to our inability to provide for a structural interpretation. It is likely that
the results mix up different effects, with the standard poaching story being com-
pensated (even more than compensated in some specifications and time periods) by
the fact that firms may strategically combine training opportunities and their right to
unilaterally terminate the contract at a given date in order to select the ‘best’ workers.
Hence, even if temps are more likely to quit, firms may be willing to provide them
with training opportunities (and the workers may be willing to invest in training
because it signals their abilities).
5.5 Conclusions
The paper has examined the incidence of temporary employment in Italy. It

appears that temporary employment is more widespread among the groups of
workers weakest in terms of skills and local labour market context. A temporary
status is also more frequent among youths, students, and people still in the school-
to-work transition period. In the 2004–2006 period, there was a further rise in the
incidence of temporary work, which mostly occurred across the board, with a
difficult-to-examine contribution of business cycle factors, to which temporary
work is usually strongly related.
Temporary jobs are mostly accepted because of the lack of alternatives.
Although we constructed an indicator of the involuntariness of temporary
positions on this basis, it was stressed that this indicator inevitably suffers from
ambiguities. Interpreted as an indicator of dissatisfaction with the ongoing
work, the incidence of involuntariness is mostly affected by industry and
occupation. However, there is no precise link between the incidence of tem-
porary jobs and their degree of ‘involuntariness’ in different subgroups and
local labour markets within Italy. Moreover, the lack of alternatives, as a cause
of temporary status, is not necessarily related to the content and the contractual
15
Empirically the LFS data allow categorization of people who, within the last four weeks, were
in regular education or attended courses, seminars, conferences or received private lessons or
instruction outside the regular educational system. We considered all these taught learning
activities to be training, both relative to the job and to personal/social training opportunities.
details of the temporary position: actually, repeated spells with the same
employer (the cases closest to a situation of abuse by the employer of the
temporary clauses) and seasonal activities appear to be the least likely to be
taken solely because of the lack of alternatives.
Whatever its origins, the temporary status appears positively associated with the
search for job alternatives. We maintain that this may be a more reliable indication
of the lower quality of temporary jobs. However, if there exists an association
between temporary status and the search for alternatives (controlling for a wide
array of compositional and contextual effects possibly affecting job search activ-
ities), it has nevertheless weakened over time. Neither does it appear that being
employed on a temporary contract is negatively associated (again controlling for a
host of covariates) with training activities
References
Accornero, A. (2006). San precario lavora per noi. Milano: Rizzoli.

Acemoglu, D., & Pischke, J. (1999). Beyond becker: Training in imperfect labour market.
Economic Journal, 109, 112–142. February.
Anastasia, B., Disarò, M. & Maurizio, D. (2004). Occupati stabili, mobili, temporanei in Veneto:
misure di consistenza e di ‘‘lock in’’. Veneto Lavoro, I tartufi, 16.
Barbieri, G., & Sestito, P. (2008). Temporary workers in Italy: Who are they and where they end
up? Labour, 22(1), 127–166.
Bassanini, A., Booth, A., Brunello, G., De Paola, M., & Leuven E. (2005 june 11). Workplace
training in Europe. Report prepared for the seventh European conference of the Fondazione
Rodolfo DeBenedetti, Venice.
Ministry of Labour. (2006). Rapporto di monitoraggio sulle politiche occupazionali e del lavoro,
http://www.lavoro.gov.it.
OECD. (2002). Employment outlook. Paris: OECD.
Pirrone, S., & Sestito, P. (2006). Disoccupati in Italia. Bologna: il Mulino.
Sestito, P. (2002). Il mercato del lavoro in Italia. Com’è. Come sta cambiando. Roma-Bari:
Laterza
Sestito, P. (2004). Compatibilità finanziarie ed effetti economici della legge Biagi. M. Tiraboschi
(Ed.), La riforma Biagi del mercato del lavoro—Prime interpretazioni e proposte di lettura del
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275–328.
Chapter 6
Temporary Help Workers in Italy.
Where Do They Come From
and Where Do They Go?
Federica Origo and Manuela Samek Lodovici
6.1 Introduction
Temporary help work is a quite recent phenomenon in the Italian economy, but its
share of total employment has been continuously increasing since its formal
introduction in 1997 (with law 196/1997, also known as the ‘Treu Package’, after
the name of the Ministry of Labour who proposed it).
According to recent estimates, at the end of 2006 around 270 thousand workers
were employed on temporary help contracts, corresponding to almost 1% of total
employment (more than 1.5% of dependent workers). Temporary help work is still
increasing, although at a slower pace than at the end of the 1990s (Ministry of
Labour 2007).
The main purpose of this type of contract is to help firms to cope with demand
peaks without incurring the cost of selecting and recruiting new workers.
According to the law, temporary help work should be always allowed, except for
replacing workers on strike, in firms which have made collective lay-offs in the
previous 12 months and for jobs that require medical supervision. Subsequent
collective agreements have narrowed the scope for using this specific type of fixed-
term contract to production peaks, temporary substitution of absent employees,
and recruitment of skills not available within the firm. They also stipulated the
maximum proportion of the workforce that can be hired on a temporary help
contract (which, depending on the specific economic sector, is between 8 and 15%
F. Origo (&)
Department of Economics ‘‘Hyman P. Minsky’’, University of Bergamo,
via dei Caniana 2, 24127 Bergamo, Italy
e-mail: federica.origo@unibg.it
M. S. Lodovici
Istituto per la Ricerca Sociale IRS, Via XX Settembre 24, 20123 Milan, Italy
e-mail: msamek@irsonline.it
106 F. Origo and M. S. Lodovici
of permanent employees) and the maximum duration of each individual contract

(no more than four extensions, for a maximum cumulated duration of 24 months).
From a labour market policy perspective, temporary help work has also been
seen as a good way to increase individual employability and to ease the school-to-
work transition. Temporary help contracts should then increase job opportunities
for the unemployed (mainly when standard contracts are closely regulated and
costly in terms of firing restrictions) and reduce the probability of experiencing
long spells of unemployment.
In light of this second aim, a broad strand of empirical literature has studied the
transitions of temporary help workers in the labour market. The main purpose of
these studies has been to evaluate whether temporary help work can enhance the
probability of obtaining a stable job, rather than becoming a ‘trap’ whereby the
longer a worker is hired on a temporary help contract, the lower his/her probability
of exiting from this state.
Although it may be the case that some individuals want to remain temporary
help workers for a long time (Houseman et al. 2003), this type of contract is
usually accepted while workers look for better and stable job opportunities. In this
sense, temporary help work should be a sort of ‘springboard’ to permanent
employment, allowing the most disadvantaged people in the labour market (such
as the long-term unemployed, young first job seekers, prime-age women looking
for a job after an inactivity spell, immigrants, etc.) to increase their human capital
and to acquire new skills. Furthermore, temporary help work experiences should
enable these workers to show their productivity and quality to employers (in spite
of the prejudices that the latter often have against these categories), thus increasing
their future likelihood of obtaining a stable job.
From this perspective, temporary help work should increase labour market
efficiency as long as it favours individual transitions to stable employment, mainly
for involuntary temporary help workers (i.e., those who have accepted temporary
help contracts because they have been unable to find a permanent job). By con-
trast, policy–makers may have to deal with new problems if temporary help
contracts do not significantly influence the probability of finding a stable job (even
if they increase the probability of exiting unemployment), eventually generating a
vicious circle between unemployment and temporary work.
Although it is reasonable to assume that individuals and society both prefer
temporary jobs to (long-term) unemployment, from a policy point of view the
problem may merely shift from the traditional ‘unemployment trap’ to a new
‘temporary help work trap’ (or to the above-mentioned ‘unemployment-temporary
help work–unemployment’ vicious circle), raising new questions concerning the
(mal)functioning of the labour market and the effectiveness of the measures in
place to correct market failures.
This problem may be even more serious if temporary help work is a ‘trap’ only
for relatively disadvantaged groups in the population, so that the ‘stigma’ is shifted
from unemployment to temporary help work. More in general, in order to improve
the focus of public policy intervention, it is important to determine whether the
probability of moving from temporary help work to different labour market states
6 Temporary Help Workers in Italy 107
(such as stable employment, other temporary contracts, unemployment, education)

is influenced by unobserved individual characteristics (such as ability, motivation,
psychological attitude towards work and life) or whether, regardless of these
features, it depends on the duration of temporary help employment, so that the
longer an individual stays in this state, the lower his/her probability of exiting it
(state dependence).
It is clear that, in the case of individual heterogeneity, labour market policies
should be more closely targeted than in the case of state dependence: in the former
case, specific measures should be addressed to workers whose characteristics
negatively influence their probability of obtaining a stable job; in the latter case,
public intervention should be more generally aimed at minimizing the duration of
temporary employment for all the workers concerned.
In light of these considerations, this study examines the transitions of temporary
help workers in Italy, controlling for individual, job and firm characteristics.
Taking into account of the complexity of individual employment histories, in the
empirical analysis we shall model the probability of transition from temporary
help work to different labour market states (stable employment, other forms of
temporary employment, unemployment, or education) and the role played by state
dependence.
The rest of this study is organized as follows. The next section presents the
theoretical background and the main results of previous empirical studies on the
transitions of temporary help workers, paying special attention to evidence on
Italy. Section 6.3 describes the main features of the dataset used in the empirical
analysis, whose main results are reported and discussed in Sect. 6.4. The last
section makes some concluding remarks and draws some policy implications.
6.2 Literature Background
A strand of the socio-economic literature on temporary help work has studied the
impact of this form of employment on the probability that individuals will transit
to other states in the labour market, in particular to stable employment.
Economic theory predicts two positive effects of temporary help work on the
probability of finding a stable job: a direct (signalling) effect and an indirect (via
human capital) effect. Firms may in fact use temporary help contracts to ascertain
the real productivity and quality of workers before hiring them on a permanent
basis. The probability of finding a stable job may also be increased because, during
the temporary help work experience, individuals acquire new skills and increase
their human capital. Furthermore, in markets with imperfect and incomplete
information (as is usually the case of the labour market), temporary help work
should favour the exchange of information between firms and workers, enabling
the latter to enlarge their social networks and to acquire more information on
vacancies (with permanent contracts).
On the other hand, signalling theory predicts that temporary help work may
reduce the probability of obtaining a stable job if acceptance of a temporary help
contract is interpreted as a negative signal by the firm, since this behaviour may
hide difficulties in entering the primary labour market (characterized by stable
jobs). Furthermore, according to human capital theory, firms may be less prone to
pay for the specific human capital accumulated by these workers due to their high
level of turnover.
Given the lack of unambiguous theoretical predictions on the impact of
temporary help work on the probability of finding a stable job, the issue must be
addressed empirically.
Many empirical studies have evaluated whether temporary help work experi-
ence facilitates entry into the labour market, leading the individual to stable
employment. According to an international study by the OECD (2002), the
probability of transition to stable employment differs significantly across countries,
ranging from 21% in France to 56% in Austria. Despite these differences, the
average characteristics of temporary help workers who obtain stable jobs are quite
similar across countries: such workers are usually young (aged 25–34) and highly
skilled/educated. Furthermore, almost everywhere, temporary help workers are
much more likely to become unemployed than are workers on permanent contracts
(7–24%, against 1–5%).
International evidence on specific countries points up the different roles that
temporary help work may play in the labour market. For example, in the case of
Spain, Guell and Petrongolo (2007) found that this type of contract is used by firms
for two main reasons: to increase labour flexibility (in the presence of high firing
costs associated with permanent contracts) and to screen workers’ quality.
Studying the probability of transition to stable employment in relation to the
duration of temporary help contracts, Guell and Petrongolo found that this prob-
ability is relatively higher both 1 and 3 years after the contract has been signed.
The former peak may be associated with the use of temporary help contracts as
screening devices, while the latter is evidence of the need for flexibility within
firms (3 years is in fact the maximum duration of this type of contract in Spain,
after which the firm must either let the worker go or hire him/her on a permanent
contract). Further evidence on Spain highlights the important role played by
temporary help agencies in favouring the creation of stable employment, mainly in
the case of continuing and long temporary help work experiences (Malo and
Munoz-Bullon 2002).
Empirical evidence on the Netherlands shows that the (positive) probability of
finding a permanent job is closely influenced by individual characteristics, and that
it is relatively higher for young men (mainly with medium levels of education)
with a working partner, and for women without children (de Graaf-Zijl et al.
2011). Nonetheless, other evidence from the Netherlands indicates that temporary
agency work does not contribute to creating a dual labour market: for instance,
women and immigrants, who have greater probabilities of obtaining temporary
help work, are as likely as other workers to subsequently achieve a stable job
(Russo et al. 1997).
Evidence from Great Britain shows that temporary agency workers are less
satisfied with their working conditions, receive less training, and earn lower wages
than stable employees (Booth et al. 2002).
Overall, the international evidence suggests that temporary help work may
assist people in escaping unemployment (Garcia-Perez and Munoz-Bullon 2005),
but this effect may be much weaker for specific groups in the population, mainly
women with small children and older workers, who are more likely to become
unemployed again once the temporary help contract has expired (D’Addio and
Rosholm 2004).
Empirical evidence for Italy is relatively recent, and it mostly confirms, on the
one hand, the role of temporary help work as a springboard to stable employment,
and on the other one, its twofold use as a screening device and as a means to
increase flexibility.
With reference to non-permanent workers aged between 18 and 40 and resident
in Tuscany and Sicily, Ichino et al. (2003) estimated that temporary help work
significantly increases the probability of obtaining a stable job one and half years
later (28, against 14% without temporary work experience). However, this
improvement is evident with other forms of temporary work as well. Another piece
of evidence shows that the probability of transiting from a temporary help contract
to a stable job is higher for contracts with a medium duration (around 6 months), a
length of time long enough for the company to ascertain the worker’s productivity,
but not so long that it becomes excessively costly with respect to other kinds of
employment contract (Montanino and Sestito 2003). Furthermore, a more general
study on temporary work (which considered also fixed-term contracts different
from temporary help ones) shows that the probability of transition to stable
employment is lower for individuals whose work careers are characterized by
continuous transitions between employment and unemployment, or by a large
number of short temporary contracts (Gagliarducci 2005).
The current empirical evidence then seems to highlight the existence of quite
different types of temporary help workers and different reasons for the use of this
type of contract. Considering the number and the average duration of temporary
help contracts, Incagli and Rustichelli (2002) define four different types of tem-
porary help workers: occasional, characterized by a low number of relatively short
temporary help contracts; fixed-term, who have experienced few but relatively
long temporary help work experiences; marginal, who have cumulated a large
number of short temporary help contracts; and permanent, whose number of days
worked in a year equals that of similar permanent workers but is the result of
subsequent temporary help work experiences (Fig. 6.1).
The above classification also suggests that the probability of a certain worker
ending up in one of these categories depends closely on both his/her individual
characteristics and those of the employing firm(s). Furthermore, the quality of the
match between workers and firms (and hence the characteristics of temporary help
jobs) may also influence the probability of transition to stable employment.
In the empirical analysis we shall take into account of all these aspects.
Average length of temporary help work contract:

N. contracts: Short Long
Few Occasional worker Fixed-term worker
Many Marginal worker Permanent worker
Fig. 6.1 Types of temporary help workers
6.3 The Data
The dataset used in the empirical analysis is the result of an ad hoc (CATI) survey
conducted on a representative sample of around 2,300 temporary help workers in
Italy (for more details see IRS et al. 2005). More specifically, the sample contains
individuals who had at least one temporary help work experience during the
12 months prior to the survey.1
The dataset contains detailed information on individual socio-demographic
characteristics (such as gender, age, education, family background, socio-
economic conditions), temporary help work experiences (firms and job charac-
teristics), employment histories (employment situation both before and after the
temporary help work experience). The survey was aimed, in fact, at collecting
information on different aspects of workers’ life, focusing on their condition in the
labour market before the first temporary help job in the 12 months prior to the
survey; the temporary help work experience during those 12 months (including its
duration and subjective evaluation of this experience, mainly in terms of perceived
pros and cons); condition in the labour market at the moment of the survey;
training activities before, during and after the temporary help work experience
(distinguishing between training received as a temporary help worker and other
forms of training)2; the worker’s skills at the moment of the survey (and eventual
demand for further training in the medium and long run).
The sample contains 2,336 individuals. In light of the aim of our empirical
analysis, we selected those individuals for whom information on the overall
duration of the temporary help work experience was available. We then excluded
1
The survey was carried out between May and November 2004. Hence, the workers surveyed
had at least one temporary help work experience between April 2003 and October 2004.
2
In Italy there is a specific public fund to finance training for temporary agency workers
(Forma.Temp). Temporary help agencies contribute to the fund an amount equal to 4% of the
gross wage of temporary workers. The fund became operative in 2002 through the issue of a
‘‘Training for temporary help workers guide’’ indicating the type of training that could be
financed: basic training, vocational training, on-the-job training, and continuing training. Since
2002 further agreements between the social partners have specified that training activities should
be mainly addressed to the long-term unemployed, the disabled, immigrants, and women re-
entering the labour market.
Table 6.1 Sample characteristics: a comparison with official data (%)

Ad hoc survey 2004 Istat Labour Force Survey (LFS)
Temporary help Temporary help Other temporary Permanent
workers workers workers workers
Female 51.4 47.9 51.9 41.1
over 30 years old 46.4 61.6 56.5 81.9
By education:
College 16.3 14.2 14.3 13.3
High school 46.8 41.4 36.1 37.2
Vocational training 9.4 6.5 7 8.5
Compulsory school 27.5 37.9 42.6 41
or lower
By economic activity
Metalworking 26.9 17.7 7.6 12.5
Other manufacturing 28.4 27.3 19.3 22.3
Trade 11.9 10.4 11.7 11.4
Public 7.1 5.3 6.3 9.5
administration
Other services 25.7 39.3 55.1 44.3
those workers for whom this information was missing (93 individuals) and those
who were already on a temporary help contract before the time span considered by
the survey (390 workers, for whom we did not know the duration of temporary
help jobs before the 12 months considered in the interview). To simplify the
estimation model, we also excluded few temporary help workers moving to labour
market states that could not be grouped with other states (76 individuals).3
After applying the above criteria, we ended up with a final sample of 1,777
individuals who had at least one temporary help work experience in 2003–2004.
Comparison with official data (taken from the 2004 national Labour Force
Survey) as reported in Table 6.1 shows that our sample is quite representative of
the population of temporary help workers, with the partial exception of workers
aged over 30 and workers employed in other services (both of which categories are
under-represented). The larger share of young individuals is reflected in average
educational levels (slightly higher in our sample than in the official data), while the
lower share of workers in services is associated with a much higher share of
workers in the metalworking industry (with no substantial differences for the other
sectors).4
3
They were essentially self-employed, workers without formal contracts (neither permanent nor
temporary), and inactive people who were not students.
4
Note that when the survey was carried out, no official statistics on temporary help employment
in Italy were available. A specific question on temporary help work was introduced for the first
time in the 2004 Labour Force Survey, but the data reported here were released a few months
after the end of our survey. The sample was selected by drawing on the archives of two large
temporary help agencies (Randstad and Obiettivo Lavoro) and five regional public employment
services (two in the Centre-North of Italy, three in the South).
Table 6.2 Previous and following labour market status of temporary help workers
Whole sample Restricted sample
Before the temporary At the Before the temporary At the
help work experience in moment of help work experience in moment of
2003–2004 the survey 2003–2004 the survey
(%) (%) (%) (%)
Permanent 14.3 12.5 17.3 13.1
employment
Temporary help 16.7 40.7 – 40.3
work
Fixed-term 19.4 21.0 23.7 22.9
employment a
Self employed 2.1 1.2 2.3 –
Other employed 2.2 1.0 2.1 –
Unemployed 33.2 19.3 39.3 20.2
Student 10.0 2.8 12.5 3.5
Inactive 2.1 1.5 2.8 –
Total (N 2.336 1.777
observations)
a
Different from temporary help employment
The table also compares the average features of temporary help workers with
those of workers hired on both other temporary and permanent contracts. It
highlights that temporary help work, like other forms of fixed-term employment, is
characterized by a larger share of women and young people. Nonetheless, it seems
more widespread than other temporary contracts in manufacturing, particularly in
the metalworking sector, while it is much less used in services. This type of
specialization is distinctive of Italy; in other European countries (such as the
United Kingdom, Sweden and Spain) manufacturing firms employ only around
one-third of total temporary help workers (EIRO 2002).
6.4 Descriptive Statistics
Table 6.2 reports the labour market condition before and after the temporary help
work experience in 2003–2004. In order to take into account of the effect of the
sample selection procedure described in the previous section, we present
the results for both the whole sample and the selected sample.
Both samples show that, before the temporary agency work experience, the
majority of the subjects were unemployed or employed on temporary contracts.
Comparison of labour market status before and after the temporary work experi-
ence reveals a sharp decline in the incidence of both the unemployed and students,
accompanied by a marked increase in temporary help contracts. The other forms of
Fig. 6.2 Survival function in

temporary help employment
Kaplan-Meier estimates
employment are relatively stable, except for a slight decline of permanent workers
in the selected sample.
Overall, the figures in the table suggest that temporary help work is an effective
way to exit unemployment, and it also seems to ease the transition from school to
work. It is unclear, however, whether this type of contract is a real springboard to
stable employment or whether, instead, it may become a ‘trap’.
To provide some first (descriptive) insights into the influence of state depen-
dence on the probability of exiting temporary help employment, Fig. 6.2 depicts
the survival function (based on the non-parametric Kaplan-Meier estimator) for the
restricted sample. The survival function shows the fraction of the sample still
employed on temporary help contracts after a certain number of months have
elapsed since the first temporary help contract was signed. The median duration of
temporary help employment is around 6–8 months, but the slope of the function
suggests that the survival rate tends to decline faster in the first 12 months. This
means that it is relatively more difficult to exit from temporary help employment
for workers who have been in this state for more than a year.
Analysis of the survival function by individual characteristics does not show
marked differences by gender, educational level and ethnic group (Fig. 6.3). Some
differences seem to emerge in regard to age group, in that the probability of exiting
temporary help employment is relatively lower for young people than it is for
people aged over 30. Education seems to display some effects in the medium run:
the probability of exiting after 1 year actually decreases with education, suggesting
that the existence of state dependence may be more relevant for mid-high educated
workers.
Larger differences emerge when we consider firm and job characteristics,
mainly the number of temporary help contracts and the number of employing firms
(Fig. 6.4). More specifically, persistence in temporary help employment is higher
for workers who have had more than one temporary help contract and/or been
employed in more than one firm. Also the economic sector exerts some influence,
given that the probability of exit is lower for workers in public sector jobs, mainly
for longer durations.
Fig. 6.3 Survival function by individual characteristics
Fig. 6.4 Survival function by firms characteristics

Fig. 6.5 Survival function

by personal and firm’s
reasons
The survival function is also sensitive to the reasons that induce individuals and
firms to resort to temporary help employment. (Fig. 6.5).
Workers accepting temporary help contracts because they need work flexibility
are in fact more likely than others to exit earlier from temporary help employment,
mainly with respect to workers who have accepted a temporary help job because
they could not find a permanent one.
Regarding firms’ reasons, workers hired to substitute for employees who are
temporarily absent (for instance, because of illness or maternity leave) exit tem-
porary help employment earlier than the others in the first year. But for longer
durations, the probability of exit is lower for workers whose temporary help contract
has been used by the employer as a sort of probation period (worker screening).
6.5 Econometric Results
Estimates of the transition probabilities of temporary help workers, with specific

attention paid to the effect of the overall length of temporary help work experience,
were based on duration models.
Given the existence of different exit states, we specified a competing risk hazard
model in which temporary help workers can eventually leave the initial state to
enter: (1) permanent employment; (2) other types of fixed-term contracts; (3)
unemployment; (4) any type of educational path leading to a formal degree.
Furthermore, since we observed individuals at discrete points in time, we
specified a discrete time duration model in which the probability of transition to
a certain state depended on both observable (individual, firm and job) charac-
teristics and the baseline hazard function k(t). Econometric results were then
based on a multinomial logit model applied to a properly re-organized unbal-
anced panel dataset in which, for each person, there were as many rows as the
number of time intervals at risk of exiting temporary help employment for that
individual.5
The model specification is as follows:
expðbj xi þ kj ðtÞÞ
Pr obðY ¼ jÞ ¼ PJ j ¼ 1; :::; J ð6:1Þ
1 þ k¼1 expðbj xi þ kj ðtÞÞ
where the dependent variable measures the probability of transition to a certain

labour market state j (among the Jth available), k(t) is the baseline hazard rate (i.e.,
a function of the overall length of the temporary help work experience), and X a
set of observable characteristics.
The main advantage of this estimator is that its results are easy to read (in
terms of Relative Risks Ratios). Furthermore, it allows one to model the hazard
function very flexibly. In our case, the baseline hazard function was specified
both parametrically (as the natural logarithm of t and as a polynomial function)
and non-parametrically (using a piecewise constant duration dependence func-
tion defined by a set of dummy variables, one for each t).6 On the other hand,
the main drawback of this estimator stems from its identification assumption
(the so-called ‘Independence from Irrelevant Alternatives’ IIA), requiring that
estimates are unbiased only if the individual choice of each exit state is
independent from the choice of other states not considered in the model.
The main estimates are reported in Table 6.3. As mentioned above, the
model considered four different exit states (other than staying in temporary help
employment): permanent employment, fixed-term employment different from
temporary help work, unemployment, and education.7 As a robustness check,
we estimated three different specifications which differed in the number
and types of controls used: only individual characteristics (model a), only firm
5
It has been shown that a discrete time duration model can be estimated using either an extended
multinomial logit or a complementary log–log model (Allison, 1982). Similar results were
actually obtained using a complementary log–log (cloglog) duration model. The results are
available from the authors upon request.
6
Note that a log specification of k(t) in a discrete time (logistic) model is the discrete time
analogue to the continuous time Weibull model (Lancaster 1990). On the other end, the use of a
full non-parametric baseline hazard function may impose less structure/constraints on the data.
7
In the table we report the Relative Risk Ratios (RRR). A RRR greater than one means a
positive effect of that factor on the probability of transition to a certain state (with respect to the
base category, that is, temporary help employment). By contrast, a RRR less than one means a
negative effect of that variable on the same relative probability. We also performed a Hausman
test, whose result allowed us to accept the IIA assumption.
Table 6.3 Probability of transition from temporary help employment to different labour market states, competing risks discrete time duration model
Labour market status at the (A) Employed on (B) Employed on fixed- (C) Unemployed (D) Student
moment of the survey: permanent contract term contract
a b c a b c a b c a b c
Hazard rate (logt) 0.976 1.070 1.083 1.048 1.103* 1.120** 1.076 1.101* 1.131** 0.635** 0.616** 0.712**
Individual characteristic
Woman 0.792* 0.771* 1.182 1.133 1.4495** 1.411** 0.9149 0.7614
30 and over 1.046 1.244 0.834 0.911 0.9375 1.001 0.4771* 0.465*
Italian 0.910 1.145 1.320 1.540* 0.9007 0.975 1.5056 1.4483
Married 0.909 0.760 0.629** 0.604** 1.4017** 1.451** 0.3472 0.3089
Children 0.698* 0.696* 0.815 0.821 1.1186 1.043 0.8354 1.073
6 Temporary Help Workers in Italy
Living with parents 0.944 0.839 0.656** 0.667** 1.3926** 1.444** 1.976* 2.2579**
Centre-North 1.898** 1.664** 1.376* 1.201 0.4218** 0.374** 0.7083 0.5123**
Education (ref group: compulsory school)
College degree 0.910 l.083 0.906 0.984 0.6334** 0.683* 0.2764* 0.280*
High school diploma 0.945 1.036 1.050 1.107 0.5939** 0.591** 1.2587 1.3051
Vocational training certificate 1.102 1.220 0.921 0.899 0.5723** 0.558** 0.8414 0.8586
At least one high educated parent 1.076 0.993 1.002 0.931 0.8852 0.823 1.8919** 1.711*
Employment condition before temporary
Permanent contract 1.398** 1.210 0.811 0.745** 0.701** 0.657** 0.342* 0.305**
Part time 0.906 1.044 0.909 1.005 1.318** 1.342** 1.781* 1.782*
Reasons for accepting temporary help contract (ref: other reasons)
First job opportunity 0.818 0.780 1.302* 1.253 0.9394 0.890 0.3882** 0.3779**
Hard to find permanent contract 0.658** 0.706* 1.050 1.025 0.8236 0.786* 0.200** 0.2162**
Need for work flexibility 0.729 0.865 1.057 1.030 0.8834 0.841 2.890** 2.490**
(continued)
117
118
Labour market status at the (A) Employed on (B) Employed on fixed- (C) Unemployed (D) Student
moment of the survey: permanent contract term contract
a b c a b c a b c a b c
Work experience while awaiting a 0.929 0.867 1.154 1.108 0.7867 0.772 0.624 0.6276
better job
Firm and job characteristics
No. temporary help contracts (ref group: one)
Two 0.704* 0.662** 0.734** 0.730** 0.672** 0.6964** 0.664 0.7009
Three 0.498** 0.484** 0.521** 0.526** 0.567** 0.5313** 0.350** 0.4033*
Four or more 0.293** 0.292** 0.357** 0.358** 0.454** 0.3694** 0.332** 0.2944**
No. using firms (ref group: one)
Two 1.035 1.037 1.402** 1.332** 1.116 1.220 1.260 1.095
Three or more 0.553* 0.541** 1.173 1.063 1.219 1.4767** 1.391 1.278
Economic activity (ref group: other services)
Metalworking 1.459 1.448* 0.924 0.970 1.129 1.1392 0.403** 0.5123
Other manufacturing 1.710* 1.703** 1.286* 1.342** 0.894 0.9208 0.715 1.3519
Trade 2.627** 2.609** 1.165 1.199 0.856 0.9632 1.058 1.3559
Public administration 0.344** 0.299** 0.640* 0.661* 0.618** 0.6857 0.450 0.9101
Firm size (ref group: small)
Medium 0.733* 0.737 1.179 1.198 0.836 0.834 1.042 1124
Large 0.801 0.817 0.947 0.927 0.794 0.817 0.777 0.908
Quite different work experiences 0.959 0.949 1.123 1.118 0.836 0 858 1.949* 2.294**
Reasons for using temporary help contract (ref: other reasons)
Production peaks 0.810 0.815 0.911 0.940 1.641** 1.6466** 2.638** 2.0398**
Substituting absent employees 0.745 0.828 0.947 0.939 1.700** 1.5039** 2.119** 2.029*
Probation period 1.586** 1.586** 0.979 1.029 0.766 0.7631 0.609 0.5854
Notes: The number in the table are Relative Risk Ratios (RRR). Reference state: temporary help employment. N observations: 13907; Pseudo R2 full model
(column c): 0.0575
*
F. Origo and M. S. Lodovici
Statistically significant at 10%, ** Statistically significant at 5%

and job characteristics (model b), the full set of observed characteristics (model
c).8 We present the results of the model with the logarithmic specification of
the hazard rate (first row of the table).9
The econometric estimates allow us to give better specification to the pre-
liminary results of the descriptive analysis: firm and job characteristics are more
relevant than individual ones in explaining transition probabilities, but this holds
only for some labour market states. More specifically, the former are important in
explaining the probability of moving to other employment contracts, either per-
manent or fixed-term, while individual characteristics are more significant in
explaining the probability of moving (back) to unemployment or education.
The duration of temporary help work experience does not significantly influ-
ence transitions to permanent employment, although it has a major role in shaping
transitions to other labour market states. More specifically, it increases the prob-
ability of obtaining other fixed-term contracts or of becoming unemployed, while
it reduces the probability of becoming a student. These results suggest that state
dependence is not a relevant factor in determining the transitions from temporary
help work to permanent employment, while positive state dependence (i.e., a
probability of exiting temporary help employment which decreases with the length
of temporary help work experience) is relevant in the case of education.
Also past employment history significantly affects the probability of exiting
temporary help work. Workers with permanent contracts before the temporary help
work experience are in fact less likely to obtain other temporary contracts or to
become unemployed, while there are no significant effects on the transition to
stable employment. Furthermore, workers who have had part-time jobs are more
likely to become either unemployed or students. Our results suggest that temporary
help work forms a sort of ‘bridge’ between part-time employment and unem-
ployment (for women) and education (for the young), which raises doubts
concerning the quality of part-time jobs.
The probability of transition from temporary help work to a stable job is instead
strongly influenced by the number of temporary help contracts, the number and
economic activity of employing firms, and firms’ reasons for hiring on this type of
contract. The probability of obtaining a permanent contract in fact declines with
8
The vector of individual characteristics includes: gender, age, education, nationality, marital
status, family composition (presence of children, a dummy for individuals still living with
parents), family background, residence area, employment status before temporary help work and
the reasons for accepting this type of contract. Firm and job characteristics include: the number of
temporary help contracts, the number of employing firms, economic sector and size of the firm
related to the longest contract, the existence of a link (in terms of job contents) between different
contracts, firms’ reasons for using temporary help work. Summary statistics by gender for the
whole set of controls are reported in the Appendix. Similar results were obtained using different
functional forms (such as a parabolic function of age as a continuous variable) or a larger set of
explanatory variables (for example, including training on and off the job). The results are
available from the authors upon request.
9
Estimates with alternative specifications of the hazard rate were consistent with those presented
and are available upon request.
the number of temporary help work experiences and the number of employing
firms, while it increases when the firm hires on temporary help contracts in order to
screen worker productivity.
It is worth pointing out that the number of temporary help work experiences
reduces the probability of moving to any labour market state, which suggests that
this variable may be a good indicator to use in profiling those individuals that are
more likely to become ‘permanent’ temporary help workers.
The probability of finding a stable job is also higher for workers employed in
manufacturing and trade than in services and public administrations. Employment
in the latter also reduces the probability of moving to other types of fixed-term
contracts, suggesting that the public sector is unlikely to create new jobs char-
acterized by contracts different from temporary help ones. Temporary help con-
tracts, in fact, have been the most common means used in the public sector to
overcome the turnover limits imposed by law in order to reduce public spending.
The hiring freeze may also explain the very low probability of getting a stable job
in this sector. Furthermore, the larger share of women in the public sector (other
than in small and medium firms; see Table A1 in the Appendix) may partly
explain their difficulties in finding stable jobs after temporary help work
experiences.10
Among personal characteristics, only gender has a significant influence on the
probability of transition to permanent employment, since it is lower for women
than for men. Of course, local labour market conditions matter as well: the
probability of transition is much higher for workers in the Centre-North of Italy,
where the labour market is tighter and unemployment rates lower than in the
South. Analysis of personal reasons for using this type of contract shows that the
probability of obtaining a stable job is relatively lower mainly for those who have
accepted a temporary help contract because they have been unable to find a stable
job.
Individual characteristics, specifically gender and education, are more impor-
tant in explaining transitions to unemployment: after a temporary help work
experience, women and the low-educated are in fact more likely to become
unemployed than, respectively, men and the high-educated. Furthermore, the
probability of becoming unemployed is higher in the South, which confirms the
role of local labour market conditions in shaping the transitions of temporary help
workers. Among firms’ characteristics, the probability of becoming unemployed is
influenced both by the number of temporary help contracts and by the consistency
(in terms of job contents) among them: workers with more than one contract but
characterized by similar tasks are less likely to become unemployed than are
workers with the same number of contracts (and the same number of employing
firms) but with different job contents.
10
Estimates of a model with interactions between gender and economic sector (available from
the authors upon request) show that employment in the public sector significantly increases the
probability that females will move either to other forms of temporary contracts or to
unemployment.
Also the reasons that induce firms to use temporary help labour may influence
the transition to unemployment, since the latter increases for temporary help
workers hired to cope with production peaks or to replace absent employees.
Finally, individual and family characteristics are important determinants of
the probability of moving (back) to education. As expected, the oldest and the
high-educated individuals are less likely to return to education, while this type
of transition is more common for those still living with their parents, or with at
least one highly-educated parent. Transitions to education are also more likely
for individuals who accept temporary help jobs because of personal flexibility
needs, or with inconsistent (in terms of job contents) temporary help work
experiences. This suggests that students often prefer temporary help jobs so that
they can gain financial support while studying, rather than doing so for long-
run reasons (such as acquiring skills not provided by formal education,
obtaining information on the actual jobs available, or establishing contacts with
potential future employers).
Estimates for local labour market conditions show that, as in the case of
unemployment, the probability of moving (back) to education is higher in the
South than in the Centre-North. Overall, our results clearly suggest that local
labour demand is a crucial factor in favouring transitions from temporary help
work to stable employment, thereby preventing the generation of continuous
transitions between unemployment and temporary help work.
This paper was aimed at empirically studying the probability of exiting temporary
help work in Italy by modelling both the transition to different labour market states
(permanent employment, other types of fixed-term contracts, unemployment, and
education) and the effect of state dependence (i.e., the effect of the overall duration
of temporary help work experience).
Confirming previous empirical findings, our empirical analysis suggests in
general that, in Italy, temporary help work is not per se a ‘trap’. However, its effect
as a ‘stepping-stone’ towards stable employment depends strictly not only on
workers’ characteristics but also on those of firms and jobs. In particular, too many
short temporary help work experiences and too many employing firms have a
negative impact on transitions to stable jobs. We have also found evidence that
these contracts are used as screening devices: some firms hire workers on a
temporary help contracts in order to assess their productivity before hiring them
permanently.
Local labour market conditions are also crucial, since transition to permanent
employment is more likely in low unemployment regions, while transitions
(back) to either unemployment or education are more likely in high unem-
ployment ones.
The analysis of the influence of individual characteristics on the probability of

transitions to different labour market states has highlighted that temporary help
workers are highly heterogeneous (also in relation to their labour market condi-
tions before and after the interim work experience), and this calls for diversified
policy interventions.
The probability of moving from temporary help work to a stable job is higher
for workers with previous stable work experiences, mainly in manual jobs in
manufacturing. The temporary help work experience for this group of workers
usually consists of few contracts with medium-long durations (around 6–8
months). For these individuals, temporary help work is an efficient way to gain
access to new stable jobs, and temporary help agencies act efficiently as inter-
mediaries in the job matching process.
The young seem to be those using more temporary help work for personal
flexibility needs, mainly to gain some financial support while studying. It is not
clear whether they also have long-run reasons for doing so (such as increasing their
future likelihood of finding stable employment by already acquiring work expe-
rience and skills not provided by formal education), because they usually accept
short and fragmented temporary help contracts, often in different employing firms
and characterized by different job contents.
The probability of moving from temporary jobs to unemployment is higher for
women and for individuals with low levels of education. Women are also more
likely to remain in temporary help employment than to move to a stable job. They
usually have many short and fragmented temporary help work experiences in
different firms, but the overall duration of temporary help work experience is
relatively long, especially if they are ‘involuntary’ temporary help workers—i.e.,
they have chosen this type of contract because they have been unable to find a
stable job.11 This is the category of workers that should be targeted with preventive
measures in order to reduce the risk that temporary work becomes a ‘trap’ (or a
‘bridge’ between two unemployment spells), a risk that is relatively higher for
low-educated women.
Appendix
See Table A1
11
Overall length is more than 8 months for women unable to find permanent jobs, 7 and
5.5 months for, respectively, women and men who have chosen a temporary help contract for
personal flexibility reasons.
Table A1 Summary Statistics
All Men Women
Mean Std. dev. Mean Std. dev. Mean Std. dev.
Woman 0.514 0.499 – –
30 and over 0.464 0.499 0.417 0.493 0.509 0.500
Italian 0.939 0.240 0.943 0.232 0.934 0.248
Married 0.311 0.463 0.218 0.413 0.398 0.490
Children 0.237 0.426 0.173 0.378 0.299 0.458
Living with parents 0.472 0.499 0.569 0.496 0.381 0.486
Centre-North 0.854 0.353 0.791 0.407 0.914 0.281
Education (ref group: compulsory school)
6 Temporary Help Workers in Italy
College degree 0.163 0.370 0.119 0.324 0.205 0.404

High school diploma 0.468 0.499 0.480 0.500 0.456 0.498
Vocational training certificate 0.094 0.292 0.096 0.295 0.092 0.289
At least one high educated parent 0.335 0.472 0.349 0.477 0.322 0.467
Employed on permanent contract before 0.175 0.380 0.169 0.375 0.181 0.385
temporary help work
Part-time employment before temporary 0.152 0.359 0.091 0.288 0.209 0.407
help work
Reasons for accepting temporary help
contract (ref: other reasons)
First job opportunity 0.286 0.452 0.292 0.455 0.280 0.449
Hard to find permanent contract 0.347 0.476 0.334 0.472 0.360 0.480
Need of work flexibility 0.074 0.261 0.074 0.262 0.073 0.261
Work experience while awaiting a better job 0.111 0.314 0.111 0.315 0.111 0.314
No. temporary help contracts (ref group: one)
Two 0.198 0.398 0.217 0.412 0.179 0.384
Three 0.158 0.365 0.152 0.359 0.164 0.371
(continued)
123
124
All Men Women

Mean Std. dev. Mean Std. dev. Mean Std. dev.
Four or more 0.279 0.448 0.292 0.455 0.266 0.442
No. using firms (ref group: one)
Two 0.157 0.364 0.161 0.368 0.153 0.360
Three or more 0.102 0.303 0.105 0.307 0.100 0.300
Economic activity (ref group: other services)
Metalworking 0.270 0.444 0.338 0.473 0.205 0.404
Other manufacturing 0.284 0.451 0.289 0.453 0.280 0.449
Trade 0.119 0.324 0.090 0.287 0.146 0.353
Firm size (ref group: small)
Medium 0.318 0.466 0.299 0.458 0.336 0.473
Large 0.450 0.498 0.469 0.499 0.432 0.496
Quite different work experiences 0.144 0.351 0.156 0.363 0.132 0.339
Reasons for using temporary help contract (ref:
other reasons)
Production peaks 0.312 0.464 0.306 0.461 0.318 0.466
Replacement of absent employees 0.170 0.376 0.130 0.336 0.208 0.406
Probation period 0.128 0.335 0.161 0.368 0.097 0.297
F. Origo and M. S. Lodovici
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strumento di flessibilità a contratto di prova. Rivista di Politica Economica, 93(3–4), 115–148.
OECD. (2002). Taking the Measure of Temporary Employment. In OECD (Ed.), Employment
Outlook. Paris: OECD.
Russo, G., Gorter, C., & Moolenaar, D. (1997). Temporary jobs and temporary workers: The
Dutch experience. Tinbergen Institute discussion papers, 97-133/3.
Chapter 7
The Dynamics of Unemployment,
Temporary and Permanent
Employment in Italy
Matteo Picchio
7.1 Introduction
In recent years, temporary employment has risen in almost all European countries,
and atypical contracts have been used to obtain labour market flexibility and to
respond to the high level of European unemployment. The standard arrangement
of Italian employees has traditionally been full-time, permanent, and characterized
by a high degree of employment protection. However, recent labour market
reforms1 have changed the institutional set-up, and atypical employment forms,
among them temporary contracts, have been growing in importance.
Researchers have extensively debated the advantages and disadvantages of
temporary contracts. Temporary jobs may increase labour market flexibility, provide
firms with means to cope with demand uncertainty, and be ‘stepping-stones’ to
longer employment relationships (Booth et al. 2002; Hagen 2003; de Graaf-Zijl and
Berkhout 2007; de Graaf-Zijl et al. 2011; Ichino et al. 2005). On the other hand, it is
has been pointed out that temporary workers face higher turnover and a greater
probability of unemployment (Dolado et al. 2002; Farber 1999) and suffer wage
penalties (Blanchard and Landier 2002; Booth et al. 2002; Brown and Session 2003;
Jimeno and Toharia 1993; Hagen 2002; Picchio 2006).
The purpose of this paper is to provide empirical evidence for the branch of the
literature that assesses whether temporary jobs may be springboards to regular
employment or to dead-end positions. Indeed, temporary job experiences may provide
As part of my PhD thesis, this study has been financed by the Marche Polytechnic University
doctoral fellowship.
M. Picchio (&)
Department of Economics, CentER, ReflecT, Tilburg University,
P. O. Box 90153, 5000 LE Tilburg, The Netherlands
e-mail: m.picchio@uvt.nl
128 M. Picchio
the unemployed with opportunities to acquire skills and knowledge, and to avoid the
deterioration of human capital and the negative signals associated with unemploy-
ment. But, if firms exploit this tool of labour market flexibility systematically to cope
with demand uncertainty without investing in temporary employees, temporary work
may become a trap. Temporary workers may not gain in terms of human capital, and
they may return to the unemployment pool without any advantages with respect to the
unemployed. It may be crucial from a welfare evaluation viewpoint to assess whether,
in Italy, temporary contracts have provided stepping-stones to permanent positions.
Therefore, the aim of this paper is to determine whether having a temporary job today,
rather than being unemployed, increases or decreases the probability of having a
permanent job within a few years, once individual observables and unobservable
characteristics have been controlled for.
The econometric analysis reported by this paper was performed using the 2000,
2002, and 2004 waves of the Survey of Italian Households’ Income and Wealth
(SHIW), a representative survey conducted by the Bank of Italy every 2 years since
1989. Raw probabilities of permanent employment conditional on the past working
status highlight that a temporary position, rather than unemployment, increases the
probability of having a regular job 2 years’ later by about 28.4% points. It seems that
temporary contracts provide stepping-stones to permanent jobs. Yet such raw evi-
dence may be spurious. There may be certain individual characteristics that deter-
mine both the current working status and the future transition into a permanent job.
For example, more able individuals may be more willing to accept a temporary job
as an alternative to unemployment, and, at the same time, they may be those with a
higher hazard rate towards a permanent job. Hence, the stepping-stone effect from
raw data may entirely reflect the greater ability of the stock of temporary workers.
In order to remove the spurious component from the stepping-stone effect,
I estimated dynamic unobserved effects probit models for the probability of per-
manent employment; the model was dynamic because I introduced the lagged
working status among the covariates. Unobserved heterogeneity was linearly
approximated following Chamberlain’s (1980) approach, whilst the problem of
initial conditions was addressed by using both Heckman’s (1981) method and
Wooldridge’s (2005) conditional maximum likelihood estimator.
The main finding is that, ceteris paribus, having a temporary contract today,
rather than being unemployed, increases the probability of having a permanent
position 2 years’ later by about 13.5–16% points. This finding is interpreted as a
stepping-stone effect, since it derives from the estimate of a counter-factual out-
come probability.
Finally, I assessed the robustness of the stepping-stone result by relaxing the
parametric assumptions on individual heterogeneity. I estimated: (i) dynamic linear
probability models able to approximate the average partial effects, by fully con-
trolling for unobserved heterogeneity and avoiding the problem of initial conditions;
(ii) dynamic non-linear probability models where unobserved heterogeneity was
randomly drawn from a discrete distribution with a finite number of support points.
This paper is organized as follows. Section. 7.2 describes the data and reports
descriptive statistics on the sample used in the econometric analysis. Section. 7.3
7 The Dynamics of Unemployment 129
presents the econometric specification of dynamic nonlinear models for the

probability of permanent employment and sets out the estimation results.
Section. 7.4 checks the robustness of the results relaxing the parametric assump-
tions on individual heterogeneity. Section. 7.5 concludes.
7.2 Data and Sample
The empirical investigation was performed using the 2000, 2002, and 2004 waves
of the Survey of Italian Households’ Income and Wealth (SHIW).1 The SHIW is a
nationally representative survey conducted by the Bank of Italy every 2 years
since 1989. Because the question on the type of contract was introduced in 2000,
the longitudinal dimension of the sample was restricted to the period 2000–2004.
I took all individuals belonging to the panel dimension of the SHIW from 2000
until 2004, and who were either unemployed or employees. I excluded individuals
outside the 15–64 age-range in 2000 and observations with missing values for
some of the variables used in the specification of the econometric models.
The result was a balanced panel of 1,677 individuals, observed over three time
periods. Since I estimated dynamic nonlinear models of order one, i lost the first
time period, which was exploited only for the initial values.
The dependent variable was a dummy indicator, y1it ; equal to 1 if individual
i was a permanent worker at time t and 0 otherwise. The dynamic would be
captured by the lag of this indicator and by the lag of the unemployment indica-
tory21it ; which is equal to 1 if individual i is unemployed at time t. Over
2000–2004, the average composition of the labour force was as follows: 9.8%
unemployed, 6.3% temporary workers, 83.9 permanent workers.2
Table 7.1 displays the relative frequencies of permanent jobs, conditional on
past labour market state, by some individual characteristics. Inspection of the first
row of the table shows that there is a raw positive effect of temporary jobs.
A temporary worker is more than twice as likely to find a stable job position
2 years later as someone who is currently unemployed. Having a temporary job
today, rather than being unemployed, increases the raw probability of having a
permanent job in the future by about 28.4% points. This shows that, in the raw
data, a substantial stepping-stone effect is exerted by temporary contracts. The
relative frequencies of permanent employment are lower for men, young people,
and the less educated. People living in the South of Italy or in regions with higher
unemployment rates are less likely to have permanent jobs.
1
The SHIW and further details on the dataset are available on the web-server of the Bank of
Italy: http://www.bancaditalia.it/statistiche/indcamp/bilfait.
2
2 An individual is unemployed if s/he declares him/herself to be either a first-job seeker or
unemployed in section B (Employment and Incomes) question ‘Apqual’ of the SHIW
questionnaire. The information about the employees’ contract type comes from the answer to
question ‘Contratt’ of annex B1 (information about the employees’ job).
130 M. Picchio
Table 7.1 Unconditional and conditional relative frequencies of permanent employment by

individual characteristics
Unconditional Permanent Unemployed Temporary Stepping
at t-1 at t-1 at t-1 stone
effect
All 0.850 0.951 0.232 0.516 0.284
Male 0.839 0.947 0.224 0.515 0.291
Female 0.866 0.958 0.250 0.517 0.267
Age C40 0.923 0.966 0.260 0.588 0.328
Age \40 0.737 0.922 0.225 0.467 0.242
Potential 0.923 0.965 0.250 0.554 0.304
experience C20
Potential 0.748 0.926 0.228 0.490 0.262
experience \20
High school or above 0.901 0.968 0.310 0.573 0.263
Up to vocational school 0.797 0.932 0.188 0.481 0.293
Centre-North 0.920 0.968 0.296 0.574 0.278
South 0.702 0.902 0.203 0.462 0.259
Regional 0.782 0.933 0.213 0.481 0.268
unemployment
rate C median
Regional 0.926 0.969 0.328 0.574 0.246
unemployment
rate \ median
Married 0.718 0.918 0.207 0.455 0.248
Not-married 0.921 0.965 0.321 0.573 0.252
Head of household 0.924 0.968 0.297 0.559 0.262
Other household position 0.791 0.935 0.218 0.500 0.282
Spouse not working 0.870 0.940 0.321 0.534 0.213
Spouse working/no spouse 0.844 0.954 0.216 0.510 0.294
Children \6 years 0.872 0.932 0.294 0.632 0.338
No children \6 years 0.848 0.953 0.223 0.506 0.283
Observations 3,354 2,783 349 252 –
Table 7.2 reports the summary statistics of the explanatory variables used in the
econometric analysis. Table 7.3 displays the observed transitions between labour
market positions: as expected, most of the individuals show a strong persistence in
permanent jobs. Identification of the effects of interest here comes from
observations out of the diagonal of this transition matrix.
7.3 Econometric Modelling and Estimation Results
This section discusses and presents the econometric models for permanent
employment, whose estimation results are set out in Table 7.4. The starting point
(Sect. 7.3.1) is a bivariate dynamic unobserved effects probit model for permanent
Table 7.2 Sample characteristics

Mean Standard deviation Minimum Maximum
Unemployed 0.098 0.298 0 1
Permanent employed 0.839 0.368 0 1
Temporary employed 0.062 0.242 0 1
Age 40.730 10.422 15 67
Potential experience 20.249 11.464 0 58
Female 0.393 0.488 0 1
Education
None or elementary 0.082 0.275 0 1
Middle school 0.324 0.468 0 1
Vocational school 0.083 0.277 0 1
High school 0.392 0.488 0 1
University degree or above 0.118 0.323 0 1
Geographical area
North-East 0.221 0.415 0 1
North-West 0.228 0.419 0 1
Centre 0.230 0.421 0 1
South 0.199 0.399 0 1
Islands 0.123 0.328 0 1
Regional unemployment rate 0.130 0.106 0 0.384
Permanent incomea 1119.5 5691.2 -23251.8 45622.4
Transitory incomeb 0.000 8145.2 -75513.2 59038.3
Married 0.650 0.477 0 1
Head of household 0.440 0.496 0 1
Spouse not working 0.217 0.412 0 1
Children \6 years 0.104 0.306 0 1
Observations 5,031
Notes: Pooled data for SHIW waves (2000–2004)
a
Permanent income is within-individual means across the period 2000–2004 of the individual
non-labour income
b
Transitory income is defined as the deviation from the individual’s permanent income
Table 7.3 Observed transitions between labour market positions

Origin Destination Total
Unemployment Temporary job Permanent job
Unemployment 226 42 81 349
6.7% 1.3% 2.4% 10.4%
Temporary job 25 75 123 223
0.7% 2.2% 3.7% 6.6%
Permanent job 54 82 2646 2782
1.6% 2.4% 78.9% 82.9%
Total 305 199 2850 3354
9.1% 5.9% 85.0% 100.0%
Table 7.4 Dynamic probit models for permanent employment
132
Variable Bivariate model Wooldridge’s model Heckman’s model

a a
Coeff. S.E. Coeff. S.E. Coeff. S.E.
Permanent jobt1 0.968 0.143*** 0.967 0.143*** 0.780 0.203***
Unemployedt1 -0.503 0.173*** -0.504 0.173*** -0.547 0.137***
Experience 0.035 0.012*** 0.035 0.012*** 0.070 0.021***
Experience2 /100 -0.064 0.026** -0.064 0.026** -0.124 0.041***
Female -0.080 0.079 -0.078 0.078 -0.130 0.098
Education reference: none or elementary
Middle school 0.338 0.120*** 0.336 0.120*** 0.431 0.153***
Vocational school 0.356 0.157** 0.356 0.157** 0.486 0.207**
High school 0.768 0.133*** 0.767 0.133*** 0.999 0.207***
University degree or + 0.648 0.171*** 0.647 0.171*** 0.851 0.229***
Area—Reference: North–East
North–West 0.085 0.129 0.084 0.129 0.077 0.148
Centre 0.003 0.115 0.002 0.115 -0.019 0.139
South -0.337 0.190* -0.337 0.190* -0.463 0.230**
Islands -0.318 0.175* -0.320 0.174* -0.497 0.218**
Head of household 0.391 0.098*** 0.392 0.098*** 0.432 0.116***
Unemployment rate -0.818 0.726 -0.817 0.726 -1.247 0.850
Permanent income -0.036 0.008*** -0.036 0.008*** -0.046 0.011***
Transitory income -0.023 0.012* -0.023 0.012* -0.026 0.012**
Spouse not working 0.277 0.314 0.272 0.312 0.302 0.241
Married 1.149 0.564** 1.150 0.564** 1.271 0.575**
Children \6 -0.207 0.285 -0.208 0.286 -0.206 0.294
(continued)
M. Picchio
a a
D2004 0.033 0.073 0.034 0.073 0.028 0.080
Constant -0.580 0.200*** -0.580 0.200*** -0.369 0.234
Random Effect: Initial condition and time-variant variables in all time periods
Permanent employed0 0.419 0.146*** 0.420 0.146***
Unemployed0 0.003 0.173 0.005 0.173
Transitory income0 0.015 0.009* 0.015 0.009* 0.012 0.010
Transitory income1 0.036 0.010*** 0.036 0.010*** 0.040 0.014***
Spouse not working0 0.015 0.151 0.017 0.150 -0.006 0.151
7 The Dynamics of Unemployment
Spouse not working1 -0.252 0.238 -0.251 0.238 -0.266 0.202

Spouse not working2 -0.283 0.193 -0.280 0.193 -0.313 0.198
Married1 0.122 0.342 0.121 0.343 0.176 0.466
Married1 -1.000 0.472** -0.999 0.472** -1.058 0.619*
Married2 0.135 0.487 0.134 0.487 0.094 0.413
Children \60 0.151 0.184 0.150 0.184 0.159 0.228
Children \61 -0.341 0.259 -0.343 0.260 -0.405 0.312
Children \62 0.236 0.271 0.240 0.270 0.272 0.280
H0 : ½d11 ; d12 ¼ 0 v211 ¼ 27:8; p-val ¼ 0:004 v211 ¼ 27:1; p-val ¼ 0:004 v211 ¼ 18:4; p-val ¼ 0:072
Observations 3,354 3,354 5,031
Pseudo R2 0.436 0.453 0.245
Wald v2 955.7 957.3 418.6
Log-pseudolikelihood -990.4 -776.5 -1284.8
(continued)
133
134

a a
LR test of indep. equat. v21 ¼ 0:05; p-val ¼ 0:830
Average partial effects
APETU b 0.161 0.160 0.137
APEPU c 0.348 0.340 0.267
APEPT d 0.186 0.181 0.130
Notes: Number of individuals: N = 1,677
*Significant at 10%; ** significant at 5%; *** significant at 1%
a
Standard errors robust to serial correlation
b
APETU is the marginal effect of a past Temporary job (the hyperscript T) instead of Unemployment (the hyperscript U)
c
APEPU is the marginal effect of a past Permanent job (the hyperscript P) instead of unemployment
d
APEPT is the marginal effect of a past permanent position instead of a past temporary contract
M. Picchio
Table 7.5 Correct predicted status and sequences

Bivariate model Wooldridge’s model Heckman’s model
(%) (%) (%)
Correct predicted permanent employed status
Permanent employed 96.42 96.31 97.40
Temporary employed or unemployed 59.72 60.20 50.20
Overall 90.91 90.82 90.31
Correct predicted permanent-temporary employment or unemployment sequences
Always PC 97.02 96.87 97.91
From TC or U to PC 10.10 7.07 9.09
From PC to TC or U 0.00 0.00 0.00
Always TC or U 69.05 69.05 56.55
Overall 85.09 84.79 84.50
Note The acronyms PC, TC, and U respectively refer to permanent contract, temporary contract,
and unemployment
employment, which is the most general specification presented and takes into
account the endogeneity of the previous labour market state. Then, in Sect. 7.3.2,
we move to a univariate framework, whilst Sect. 7.3.3 and Table 7.5 deal with the
goodness of fit of the estimated dynamic nonlinear models.
7.3.1 Bivariate Unobserved Effects Probit Model
Let y1it and y2it be the scalar indicator variables denoting the occurrence at time
t of a permanent job and unemployment, respectively. The dynamic probability
model for permanent employment was empirically specified using a bivariate
unobserved effects probit model:

y1it ¼ 1 y1it1 q11 þ y2it1 q12 þ x01it b1 þ c1i þ u1it [ 0 ð7:1Þ
y2it ¼ 1½y1it1 q21 þ y2it1 q22 þ x02it b2 þ c2i þ u2it [ 0 if y1it ¼ 0 ð7:2Þ
where 1½ is the indicator function, x1it and x2it are vectors of skill, family, and
individual structure variables that may explain working status, c1i and c2i are time-
invariant individual heterogeneities. Finally, ðu1it ; u2it Þ is the idiosyncratic error
term, which is assumed to be bivariate standard normal with covariance qu : This
model is a modified version of that developed by Alessie et al. (2004) and follows
Stewart’s (2007).
The model is bivariate so that y2it can be endogenous in Eq. 7.1. The coefficient
of primary interest is q12 : it captures the effect of past unemployment, rather than
temporary employment (the reference category), on the current probability of
having a permanent job. It therefore conveys whether having a temporary job
today, rather than being unemployed, reduces or increases the future probability of
having a permanent position.
136 M. Picchio
The regressors vector x1it contains time-variant and time-invariant variables.

The latter category comprises the constant, education (four dummies), geograph-
ical area of residence (four dummies), and gender. The time-variant variables are
potential experience, its quadratic form, household position, marital status,
spouse’s working status, presence of pre-school children, time intercept, and
non-labour income. Following Hyslop (1999), non-labour income is decomposed
into a permanent component hpi ; which is estimated by the within-individual mean
across the sample period 2000–2004, and a transitory component hm it estimated by
the deviation from the permanent component. The idea is that permanent income
captures the total effect of income expectations on the likelihood of having a
permanent job, whereas the transitory component has a direct income effect on this
likelihood. The regressors vector x2it contains x1it and age and squared age.
Correlation between unobserved heterogeneity cji with j 2 f1; 2g and observed
characteristics is allowed by adopting a correlated random-effects specification
(Chamberlain 1980):
X
T X
T1
cji ¼ dj1s wjis þ dj2s hm
ijs þ aji ð7:3Þ
s¼0 s¼0
where wjis is a three-dimensional vector comprising marital status, spouse’s

working status, and presence of pre-school children and aji iidNð0; r2aj Þ and
independent of xjit :
In order to distinguish between spurious and true stepping-stone effects, I also
had to make assumptions about the relationship between the initial observations of
the dependent variables and individual heterogeneity. At this stage, I applied
Wooldridge’s (2005) conditional maximum likelihood approach to the initial
condition problem. I therefore modelled the density conditional on initial values,
which entered the linear approximation of unobserved heterogeneity.
The likelihood function to be maximized was given by
Y
N Y
T
L¼ y1it Uðy1it Þ þ ð1 y1it ÞU2 ½y1it ; ð2y2it 1Þy2it ; ð2y2it 1Þqu ;
i¼1 t¼1
ð7:4Þ
where U2 is the cumulative bivariate normal distribution function and yjit ¼

y1it1 qj1 þ y2it1 qj2 þ x0jit bj þ cji for j = 1, 2 and t ¼ 1; . . .; T:
The estimation results of the bivariate model are reported in the first three
columns of Table 7.4. The coefficient of the lagged permanent position is positive
and highly significant. Since the lagged temporary working status is the reference
group, having a permanent job today, rather than a temporary contract, signifi-
cantly increases the probability of having a permanent job in the future.
This result is as expected, whereas what I wanted to understand was whether a
temporary position as an alternative to unemployment is able to increase the
chances of obtaining a permanent job in the future. This is conveyed by the
coefficient of the lagged unemployment status, which is negative and highly

significant: having been unemployed at time t 1; rather than temporary
employed, decreases the likelihood of having a permanent position at time t.
In other words, an individual who accepts a temporary job today, rather than
unemployment, has a significantly higher probability of being a permanent worker
in 2 years’ time: this is the stepping-stone effect, since, ceteris paribus, a
temporary job provides an opportunity to enter regular employment.
On looking at the estimated coefficients of the other explanatory variables,
one notes that the greater the worker’s potential experience, the higher his/her
probability of having a permanent job. This finding is consistent with human
capital theory and job-search explanations. Women and lower-educated indi-
viduals are less likely to have permanent jobs. The higher the permanent and
transitory incomes, the lower the probability of having a permanent position.
An explanation for this may be provided by job-search theory: when non-labour
income increases or is constantly high, the individual has less incentives to look
for and/or accept a stable job. Finally, individuals who are heads of household or
married are more likely to have permanent jobs. It seems that the greater the
employee’s household responsibility, the higher the probability that she/he will
have a stable position.
Note that a Wald test for significance of the coefficients of the linear
approximation of the unobserved heterogeneity rejected the null hypothesis.
Performing the analysis without introducing time-variant variables in all the time
periods would have generated biased results due to their correlation with
unobserved heterogeneity. Furthermore, the coefficient of the initial employment
status was highly significant, and this finding definitively rejects a simpler
bivariate probit that does not account for unobserved heterogeneity and initial
conditions problem.
Instead, the log-likelihood ratio (LR) test for independent equations did not
reject the null hypothesis, meaning that this was a special case of the bivariate
model: since the error terms are not correlated, Eq. 7.1 could be estimated in a
univariate framework.
7.3.2 Univariate Models for the Probability

of Permanent Employment
Given the result of the LR test of independent equations, I replicated the analysis
in a univariate framework by solving the initial conditions problem following
Wooldridge’s (2005) approach and Heckman’s (1981) methodology.
As said, Wooldridge (2005) suggested that the initial conditions problem can be
dealt with by modelling the density of ðy1i1 ; . . .; y1iT Þconditional on initial condi-
tions and explanatory variables. Under the linear approximation assumption of
individual heterogeneity, we therefore have
138 M. Picchio
X
T X
T 1
c1i ¼ w þ y1i0 e10 þ y2i0 e20 þ d11s w1is þ d12s hm
1is þ a1i ;
s¼0 s¼0 ð7:5Þ
a1i Nð0; r2a1 Þ; a1i ?ðy1i0 ; y2i0 ; x1i Þ:
Model (1) can thus be rewritten as

y1it ¼ 1 y1it1 q11 þ y2it1 q12 þ x01it b1 þ w þ y1i0 e10 þ y2i0 e20
X
T X
T 1
þ d11s w1is þ d12s hm
1is þ a 1i þ u 1it [ 0 ; ð7:6Þ
s¼0 s¼0
and estimated using the standard random effects probit program integrating out a1i :
In order to relax the implicit assumption of zero serial correlation of the score, I
used a simple pooled probit estimator with standard errors robust to arbitrary serial
correlation. The price that I had to pay was a loss in terms of efficiency, in that I
obtained a scaled version of my parameters where the scaling factor was given by
ð1 þ r2a1 Þ1=2 :3
The approach proposed by Heckman (1981) instead consists of specifying a
latent variable model for the initial realization of the dependent variable:
y1i0 ¼ z0i0 c þ hc1i þ ui0 : ð7:7Þ
This equation is a linearized approximation to the reduced form equation for the
initial value of the latent variable, where zi0 is a vector of exogenous variables
(including x1i0 and a set of parental dummies)4 and ui0 is independent on c1i :
This reduced form equation is jointly estimated with the dynamic probability
r2c
model (1). Let k ðr2 1
2 be the autocorrelation of the composite error term
c1 þru Þ
between two time periods. Hence, the likelihood to be maximized is given by

8 0 9
Z >
< U zi0 c þ hrc1 c ð2y1i0 1Þ >
=
YN
L¼ Y
T ;
>
i¼1 : U y1it1 q11 þ y2it1 q12 þ x01it b þ rc1 c ð2y1it 1Þ >;
c
t¼1
ð7:8Þ
where c ¼ c1 =rc and, following from the implicit normalization r2u ¼ 1;

pffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi
rc1 ¼ k=ð1 kÞ: Since c1i is unobservable, in Eq. 7.8 we integrate it out under
3
The scaled estimates of the parameters are required to estimate the average partial effects. See
e.g. Wooldridge (2002), pp. 495, for further details.
4
The parental dummies are: four dummies indicating the parents’ maximum attained
educational levels and one dummy indicating whether one of the parents is a public employee.
the assumption that c1i is normally distributed. The integral over c1i is evaluated
using Gaussian-Hermite quadrature with 20 points.
The estimation results of these univariate models are reported in the last col-
umns of Table 7.4. Consistently with the outcome of the independent equations
LR test, the estimation results of the single equation models are in line with those
of the bivariate model. There is still a highly significant stepping-stone effect of
temporary jobs into permanent positions.
In order to provide a quantitative evaluation of the stepping-stone effect, I
estimated, following Stewart (2007), average partial effects (APEs hereafter) at the
sample means, x1 :5 The intention was to predict the probabilities of having a
permanent job conditional on different past labour market positions, so that I could
compare counter-factual outcome probabilities. The estimated APEs are reported
at the bottom of Table 7.4. Using the Wooldridge’s estimator, there is a stepping
stone effect of about 16.2% points: if an individual accepts today a temporary job
as an alternative to unemployment, his/her probability of having a permanent
position in 2 years’ time increases by about 16% points. The stepping-stone effect
from Heckman’s estimator is lower, being equal to 13.7% points.
Given these estimation results, let us summarize the main findings. We have
seen that estimating dynamic unobserved effects probit models for the probability
of permanent employment depicts temporary jobs as a channel out of unem-
ployment and springboards to stable employment. Indeed, on inspecting the esti-
mated counter-factual probabilities evaluated at the sample means and the
corresponding average partial effects, we can state that, given observable and
unobservable characteristics, an individual accepting a temporary job today, rather
than unemployment, increases his/her probability of having a permanent job in
2 years’ time by about 13.7–16% points.
Finally, I sought to determine the direction of the biases if I did not take
account of the presence of the unobservable and unobservable individual het-
erogeneity. We saw in Table 7.1 that the raw stepping-stone effect is about 28%
points. If I estimated the APEs of a dynamic probit model with no unobserved
heterogeneity, I found a stepping-stone effect of temporary jobs amounting to
about 20% points.6 Therefore, one fourth of the initial stepping-stone effect is
spurious because of observable heterogeneity x1 : When I moved to unobserved
effects models and explicitly took account of the possible presence of the
unobservable heterogeneity, I obtained an even lower estimated APE. These
findings suggest that: (i) about one half of the raw stepping-stone effect is
spurious and due to the presence of observable and unobservable individual
characteristics; (ii) the estimated marginal effect of a temporary job is upward
biased if one does not consider the presence of the individual heterogeneity.
If we assume that more able workers are more likely to transit from a temporary
5
See Appendix A-1 for more details on the definition and estimation of the APEs.
6
The estimation results of a simple dynamic pooled probit model are available from the author
but not reported for the sake of brevity.
140 M. Picchio
to a permanent contract, this implies that more able unemployed workers are
more likely to accept a temporary position instead of undertaking a further
period of job-seeking. This self-selection of more able workers into temporary
contracts is predicted by Loh’s (1994) theoretical model: temporary contracts can
be viewed as probationary periods and as sorting mechanisms for firms. Hence,
firms can attract more able workers by paying a low wage during the proba-
tionary period but promising higher wages in the future.
7.3.3 Goodness of Fit
In order to provide a descriptive evaluation of the goodness of the fit of the

dynamic nonlinear models, I report in Table 7.5 the percentages of correctly
predicted employment statuses and of correctly predicted sequences. I follow the
usual rule according to which one predicts, for each i and t, that y1it will be unity
when the estimated probability is C 0.5, i.e. U^ it 0:5: If U
^ it \0:5; y1it is predicted
to be zero. The percentages reported in Table 7.5 are the percentages of the times
when the predicted y1it matches the actual y1it : By ‘predicted sequences’ is meant
the percentages of times when the predicted sequence matches the actual sequence
fy1it ; y1it1 g:
The first column reports the correct predictions of the bivariate dynamic model,
whereas the last 2 columns set out the correct predictions when I estimated single
equation dynamic probit models using Wooldridge’s (2005) and Heckman’s
(1981) estimators, respectively.
The three different estimation techniques are very close to each other in terms
of goodness of fit. Permanent employment is very well predicted more than 96% of
the time. As regards the correct predicted unemployment or temporary employ-
ment realizations, the models are correct more than 50% of the time.
I now move to the correct predicted permanent employment sequences. In light
of the overall results, we may argue that the dynamic models were indeed able to
predict the transitions, since they correctly predicted sequences more than 85% of
the time. But, on looking at each possible sequence, it is apparent that my models
could not predict permanent/unemployment-temporary job sequences, and that
they performed poorly in predicting unemployment-temporary job/permanent
sequences (around 10% of the time). Conversely, the dynamic models performed
well in predicting time-invariant sequences.
7.4 Robustness Analysis
In this section I report assessment of the robustness of the stepping-stone effect by

relaxing the parametric assumptions on the individual heterogeneity. Therefore, I
replicated the Heckman’s procedure for initial conditions (Sect. 4.1), but the
residual a1i of the linear approximation of the unobserved heterogeneity c1i was
assumed to have a discrete mass point distribution.
Section 4.2 instead focuses on dynamic linear probability models for permanent
employment, since these provide satisfactory estimates of average partial effects
near the centre of the distribution of the covariates: first-differencing is a
straightforward way to eliminate the time-persistent individual heterogeneity and
to avoid any problem of initial conditions. As pointed out by Stewart (2007), since
no particular parametric assumption about unobserved heterogeneity is required,
this approach may be considered a semi-parametric method, compared with the
dynamic nonlinear models discussed thus far.
7.4.1 Discrete Distribution of the Individual Heterogeneity
I used a specification of unobserved heterogeneity alternative to the ones that

characterize the Heckman’s and Wooldridge’s estimators. Instead of imposing
normality, the distribution of a1i was assumed to be discrete with mass point,
ad1 ; d 2 f1; . . .; Dg; and corresponding probability pd : I specified probabilities p1
to pD using a multinomial logit model:
exp kd
pd ¼ PD ; kD ¼ 0; d ¼ 1; . . .; D: ð7:9Þ
j¼1 exp kj
Therefore, I maximized the following discrete mixture likelihood function:

8 2 0 39
> U zi0 c þ had1 ð2y1i0 1Þ >
N >
Y <XD 6 " !
>
# 7=
L¼ pd 6
4 Y
T X
T X
T 1 7
5
> d¼1
i¼1 > U y1it1 q11 þ y2it1 q12 þ x01it b1 þ d11s w1is þ d12s hm d
1is þ a1 ð2y1it 1Þ
>
>
: ;
t¼1 s¼0 s¼0
ð7:10Þ
where D is chosen according to the Akaike Information Criterion (AIC).
The estimation results of the discrete mixture probability model are reported in
Table 7.6. According to the AIC, unobserved heterogeneity seems to be important,
but only two points of support are detected: the first one has a 16.8% probability
mass, whereas that of the second is 83.2%. The estimated coefficient of the lagged
unemployment indicator is significantly negative and close to those presented
above. Once again, a temporary job today, rather than unemployment, significantly
increases the probability of having a permanent position in 2 years’ time. The
marginal effect of a temporary contract instead of unemployment is in line with
those obtained previously, and it lies between the estimates of the APEs obtained
using Heckman’s and Wooldridge’s approaches. This finding assesses the
robustness of the results obtained under the parametric assumption on the indi-
vidual heterogeneity.
142 M. Picchio
Table 7.6 Discrete Mixture Dynamic Model for Permanent Employment

Variable Coeff. S.E.
Permanent jobt1 0.654 0.170***
Unemployedt1 -0.643 0.133***
Experience 0.080 0.020***
Experience2 /100 -0.147 0.041***
Female -0.102 0.103
Education—Reference: None or Elementary
Middle school 0.492 0.161***
Vocational school 0.492 0.233**
High school 1.036 0.203***
University degree or + 0.809 0.222***
Area—Reference: North–East
North-West 0.033 0.177
Centre -0.082 0.166
South -0.535 0.251**
Islands -0.548 0.232**
Head of household 0.407 0.126***
Unemployment rate -1.360 0.865
Permanent income -0.044 0.012***
Transitory income -0.018 0.010*
Spouse not working -0.060 0.196
Married 0.938 0.457**
Children \ 6 -0.158 0.325
D2004 -0.076 0.118
Unobserved heterogeneitya
h 1.705 0.524***
a11 -1.347 0.315***
a21 -0.040 0.206
k1 -1.598 0.298***
p1 0.168
p2 0.832
Average Partial Effects
APETU 0.153
APEPU 0.240
APEPT 0.086
AIC 1.607
Observations 5,031
Log-likelihood -1,283.3
a
The estimated coefficients of the time-variant variables in all time periods are not reported for
sake of brevity
7.4.2 Dynamic Linear Probability Models
I adopted the following dynamic linear probability model specification for Eq. 7.1:
y1it ¼ y1it1 q11 þ y2it1 q12 þ x01it b1 þ c1i þ u1it ; ði ¼ 1; . . .; N; t ¼ 0; 1; 2Þ

ð7:11Þ
First differencing is a simple way to get rid of individual heterogeneity, yielding
Dy1it ¼ Dy1it1 q11 þ Dy2it1 q12 þ Dx01it b1 þ Du1it ; ði ¼ 1; . . .; N; t ¼ 1; 2Þ;
Since Dy1it1 and Dy2it1 are possibly correlated to Du1it ; this model can be con-
sistently estimated by using y1i0 ; y2i0 ; and noncontemporaneous realizations of the
explanatory variables as valid excluded instruments.
The estimation results of dynamic linear probability model are displayed in
Table 7.7. The upper panel reports ordinary least squares (OLS), instrumental
variables (IV), and efficient generalized method of moments (GMM) estimates of
the first-differenced dynamic model, whereas in the lower panel the dynamic
model is in level. The coefficients of primary interest are those associated with the
lagged unemployment status, and since their reference is lagged temporary
employment, they directly provide an approximation of the average partial effect.
The OLS estimates from the model in first-differences and the model in levels
are -0.089 and -0.258, respectively. The former is biased upward due to positive
correlation between Dy2it1 and Du1it ; while the latter is biased downward due to
negative correlation between y2it1 and the unobservable heterogeneity.
The central columns report IV estimation results using: y1i0 and y2i0 as
instruments for Dy1it1 and Dy2it1 in the first-differences specification; Dy1it1 and
Dy2it1 as instruments for y1it1 and y2it1 in the level specification. The estimated
lagged unemployment status coefficients are now -0.105 and -0.138: hence they
converge on each other. The F-tests for excluded instruments, as suggested by
Staiger and Stock (1997), show no sign of weakness in the instruments.
Finally, the last three columns report the efficient GMM estimation results,
introducing as further instruments the initial values of time-varying explanatory
variables. In this way, we gain in terms of efficiency and test the validity of the
instruments with a standard over-identification test. The over-identification tests do
not reject the null hypothesis, so that the instruments seem to be valid. The
stepping-stone effect is between 13 and 15.8 percentage points. Therefore, fully
controlling for unobserved heterogeneity and avoiding the initial conditions
problem indicate that having a temporary job, rather than being unemployed,
increases by about 13 and 15.8% points the future probability of having a per-
manent position. This is a further finding which gives robustness to the conclusions
derived from dynamic nonlinear probability models.
144 M. Picchio
Table 7.7 Dynamic linear probability models estimation results

Variable OLS IV GMM
a a
First-difference specification
DPermanent jobt1 -0.392 0.042*** 0.254 0.086*** 0.215 0.083**
D Unemployedt1 -0.089 0.060 -0.105 0.109 -0.130 0.106
D Experience2 /100 -0.076 0.019*** -0.038 0.023* -0.040 0.022*
D Head of household -0.066 0.025*** -0.063 0.032* -0.069 0.030**
D Unemployment rate -0.141 0.290 -0.176 0.356 -0.094 0.343
D Transitory income -0.002 0.001** -0.002 0.001** -0.003 0.001**
D Spouse not working 0.054 0.055 0.059 0.063 0.042 0.061
D Married 0.063 0.039 0.108 0.068 0.100 0.067
D Children \6 0.003 0.026 -0.025 0.038 -0.023 0.038
Constant 0.090 0.020*** 0.040 0.024* 0.041 0.023*
F-test exc. Instruments: – F(2, 1667) = 115.4 F(11, 1658) = 23.3
D Permanent jobt1 – p-value = 0.000 p-value = 0.000
D Unemployedt1 – p-value = 0.000 p-value = 0.000
Hansen J statistics – – v29 ¼ 7:577
– – p-value = 0.577
Level specification
Permanent jobt1 0.346 0.033*** 0.180 0.077** 0.197 0.075***
Unemployedt1 -0.258 0.041*** -0.138 0.109 -0.158 0.104
Experience 0.008 0.002*** 0.016 0.004*** 0.015 0.004***
Experience2 /100 -0.014 0.005*** -0.029 0.009*** -0.027 0.008***
Head of household 0.020 0.010* 0.019 0.015 0.017 0.014
Unemployment rate -0.189 0.119 -0.361 0.197* -0.333 0.188*
Transitory income -0.001 0.001 0.000 0.001 0.000 0.001
Spouse not working 0.003 0.013 0.011 0.019 0.006 0.016
Married 0.042 0.012*** 0.069 0.018*** 0.065 0.018***
Children \6 -0.021 0.019 -0.014 0.034 -0.006 0.033
Constant 0.445 0.044*** 0.472 0.081*** 0.473 0.080***
Permanent jobt1 – p-value = 0.000 p-value = 0.000
Unemployedt1 – p-value = 0.000 p-value = 0.000
Hansen J statistics – – v27 ¼ 5:566
– – p-value = 0.591
a
White (1980) robust standard errors have been computed
The paper has assessed whether and to what extent temporary jobs have been
springboards to regular employment or to dead-end positions in Italy, using for the
purpose the 2000, 2002, and 2004 waves of the SHIW. The sample was made up of
individuals who were unemployed, permanent employed, and temporary employed
in 2000, 2002, and 2004.
I estimated a bivariate dynamic unobserved effects probit model to predict the
probability of having a permanent position given the lagged labour market state.
The main finding was that, ceteris paribus, having a temporary contract today,
rather than being unemployed, increases the probability of having a permanent job
2 years later by about 13.7–16.2% points.
This evidence suggests that, given observable and unobservable characteristics,
temporary contracts in Italy are stepping-stones to permanent jobs. They enable
individuals to leave unemployment by giving them the opportunity to acquire
general (and possibly) specific skills so that they are permanent employable
afterwards.
Finally, I estimated dynamic discrete mixture and linear probability models to
assess the robustness of the stepping-stone effect to the parametric assumptions
about the individual heterogeneity. The average partial effects estimated using
these two approaches, which were nonparametric in the specification of the
unobserved heterogeneity, are in line with those obtained with dynamic nonlinear
unobserved effects probit models.
Appendix
A.1 Estimation of the Average Partial Effects
In the analysis reported, the APEs, or marginal effects, were estimated following
Stewart (2007): I estimated the counter-factual outcome probabilities evaluated at
the sample means, x1 :
Let us call pU ; pP ; and pT the probability of permanent employment given,
respectively, unemployment, permanent employment, and temporary employment
at time t 1: Hence, on performing the Wooldridge’s analysis, I had that
1X N h i 1X N h i
pP ¼
^ ^ þq
U x1 b ^11 þ ^c1i ; pU ¼
^ ^ þq
U x1 b ^12 þ ^c1i ;
1 1
N i¼1 N i¼1
and
1X N
^ þ ^c1i ;
pT ¼
^ U½x1 b 1
N i¼1
146 M. Picchio
where ^c1i is the estimated linear approximation (7.5) of unobserved heterogeneity.

When I adopted the Heckman’s estimator, the outcome probabilities had to be
rescaled because of a different normalisation, so that the arguments of the standard
normal c.d.f were multiplied by ð1 ^ kÞ1=2 : Moreover ^c1i is, in this case, the
estimated correlated random effect according to specification (7.3).
Hence, the estimated APEs were defined as APE ^ HJ ¼ ^pJ ^pH with J,H =
U,P,T. For example, APE ^ UT was the effect of a temporary job at time t 1; rather
than unemployment, on the probability of being a permanent worker at time t.
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Chapter 8
Labour Market Segmentation, Flexibility
and Precariousness in the Italian
North East
Giuseppe Tattara and Marco Valentini
8.1 Introduction
Since the late 1970s, inequality has been on the rise in a number of OECD
countries. Many factors enter into the determination of income inequality: low-
paid jobs, new flexible ‘non-standard’ patterns of employment, and unemploy-
ment. These factors play an important role in determining household poverty
because they are only partially counteracted by the various government transfer
programmes and social policies.
In Italy as in many other European countries, one of the main causes of eco-
nomic inequality is segmentation of the labour market. The Italian labour market is
currently described as deeply segmented between an insider market, with well-
paid and stable jobs protected by government laws and powerful labour unions,
and a large outsider market made up of the unemployed and by people discouraged
from entering the labour force. Outsiders are mainly young, unemployed, and
geographically clustered in the centre-south of the country.1 The OECD’s views
This research is part of the Miur project 2001–2002, n. 2001134473 and 2003–2004,
n. 2003139334. A previous version of this paper was discussed at IWPLMS, International
Working Party on Labour Market Segmentation, Rome, September 2003.
1
See Kerr (1954), Doeringer and Piore (1971), Wilkinson (1981). In regard to Italy see Garibaldi
and Young (2003); in comparative terms Nickell (1997) and OECD (1994).
G. Tattara (&)
Department of Economics, University Cà Foscari Venice, Cannaregio 873,
30121 Venice, Italy
e-mail: tattara@unive.it
M. Valentini (&)
Tolomeo Studi e Ricerche srl, Via S. Bona Vecchia 62, 31100 Treviso, Italy
e-mail: marco.valentini@tolomeoricerche.it
150 G. Tattara and M. Valentini
have recently been disputed on the ground that they reflect the plethora of pro-
tective regulations imposed by Italian labour-market legislation rather than being
an assessment of their actual effectiveness. For example, the protection against
firing granted by the Statuto dei lavoratori to workers in large firms (=[ 15
employees) in the absence of misbehaviour applies only to half of the stock of
private employees in Veneto. For a criticism of the OECD thesis, see Del Conte
et al. (2004). In the insider market, entrepreneurs pay good wages and hire on the
contratto di lavoro tipico, that is, a full-time open-ended work contract.2
Opportunities to move between these two labour markets are severely limited,
and several attempts to spread new forms of labour contracts in order to render the
market more flexible have been made by the various Italian governments since the
1980s. Most observers consider the wider diffusion of new forms of temporary
labour contracts to be a way to remedy the rigidity of the Italian labour market and
to induce Italian entrepreneurs to hire workers without fear of locking themselves
into a permanent commitment. Hence more flexible contracts are frequently
advocated as the main means to reduce Italy’s high rate of unemployment.
How the spread of temporary contracts has changed the nature of the Italian
labour market is difficult to assess. Official Italian statistics grossly underestimate
the number of people working on short-term contracts, and a more thorough account
of various forms of temporary contracts more than doubles the official figures,
ranking Italy among the countries with the largest amounts of temporary work. The
(supposedly) rigid Italian labour market is less rigid than appears at first sight.
In the Italian manufacturing sector, which has a traditionally high quota of
stable workers, a double shift has taken place in recent decades. First, the quota of
stable workers has declined over time. Second, the number of unstable workers,
low-qualified and low-paid, has increased, and represents a non-marginal pro-
portion of total employment.
Frequently, a young worker will move through a succession of temporary
contracts at the beginning of his/her career. This initial precariousness can be
regarded positively as developing specific human capital which prepares the
worker for a more permanent position with the same firm or with other firms, and
possibly with higher wages, so that the worse initial conditions are off-set by better
conditions in the future. But the outcomes for temporary workers are frequently
different: the precariousness extends across the entire career, with the consequence
that these workers should be considered extreme cases of outsiders with bad
working conditions and receiving low wages compared to those of workers hired
on open-ended contracts. Several authors have stressed that workers at the bottom
of the Italian wage distribution are’trapped’ in their jobs and seldom move to
better ones (Capellari 2002; Lucifora 1998). Whilst temporary contracts avoid
2
Italian labour contracts are split into two broad classes, tipico and a-tipico. Atipico is defined
residually and refers to all contracts which do not fall under the heading of the tipico contract,
which is full-time and open-ended, or tenure. On the historical origin of the terms, which date
back to the populism of the fascist regime, see Accornero (2000, pp. 191–192).
8 Labour Market Segmentation, Flexibility and Precariousness in the Italian North East 151
certain labour-market inflexibilities imposed by protective employment legisla-

tion, they also entail higher potential costs.3
These issues are important, for in June 2003 the Italian government introduced
further forms of semi-subordinate work (midway between dependent employment
and self-employment), and the desirability of this policy depends upon whether the
number of these contracts is assumed to be at present insufficient to give the labour
market the necessary flexibility, and whether such contracts are to be considered
‘dead ends’ or ‘stepping stones’, necessary transitions to more permanent careers
(Booth et al. 2002).
The first part of the chapter discusses the relation between flexibility and pre-
cariousness in the Veneto labour market. It furnishes quantitative evidence on the
increase in ‘non-standard’ forms of employment during the late 1990s and draws
some conclusions concerning the downward bias in the measures adopted in
official Italian statistics and in international comparisons. The second part of the
chapter restricts its treatment to private employees in manufacturing, dividing
them between ‘movers’ and ‘stayers’. Both categories show signs of instability.
The quota of tenured workers over total workers decreases, and movers signifi-
cantly increase over time. Among these latter are permanent movers, whose
fragmented and chaotic work histories are identified and compared with those of
workers with more stable careers.
8.2 Underestimation of Temporary Work
A flexible contract envisages possible changes in working hours, wages and

functions. But flexibility also means that a firm can straightforwardly stipulate a
new labour contract and lay the worker off without incurring redundancy payments
or restrictions imposed by labour legislation.
Self-employment is the first labour contract that comes to mind where flexi-
bility is concerned. Self-employment has no stated working time, and no stated
conditions or remuneration. It is noteworthy that, after a long period of decline,
since the mid-1970s the self-employed fraction of the labour force has increased in
several Western countries (Blau 1987; Evans and Leighton 1989; Magnac and
Robin 1994). As in other countries, in Italy too the self-employment quota in terms
of total employment has grown over time. From a minimum level of 14% in total
manufacturing in 1974 it peaked in the late 1970s. It rose again thereafter,
returning in the early 1990s to 20%, a high value which had been common 40
years previously (Rapiti 1997, pp. 176–180; Chelli and Rosti 2002).
3
The main reason why Italy ranks so high in comparison with other industrialized countries is
that since approval of the ‘‘Statuto dei Lavoratori’’ in 1970, employers that have fired workers in
the absence of misbehaviour have been forced to reinstate them, and to pay the entire wages lost
during litigation plus social insurance contributions.
The net flow of self-employed is largely the result of a net flow away from
dependent employment. The positive variation recorded by self-employment over
the past 20 years is largely explained by the net outflow from the category of
employees: people looking for work move directly into self-employment to only a
very limited extent (OECD 1992, table 4.8; Rapiti 1997, p. 181; Chelli and Rosti
1998, p. 459): A large part of workers merely substitute a stable form of
employment with a more precarious one.
Worker-membership of small cooperatives, members of partnerships are mostly
disguised forms of labour precariousness. In addition, the various kinds of labour
contracts introduced in recent years—collaborazioni coordinate e continuative
(employer-coordinated freelance work), lavoro interinale (Temporary agency
work) and other forms of lesser importance—and considered in other chapters of
this book are highly flexible forms of employment. This plurality of occupational
categories makes flexibility difficult to measure. In order to make the problem
more tractable, the discussion is often restricted to the employee labour market,
but flexibility is still difficult to identify. Statistical measures for overtime, changes
in functions, and other forms of flexibility are lacking within the more structured
employee segment as well.
In everyday discourse, ‘flexible’ is often identified with ‘atypical’, and a widely-
used indicator of flexibility is the quota of atypical workers over total employees.
Atypical contracts are the sum of those of part-time workers and temporary workers.
Part-time work with no time limits (although sometimes involuntary) is an
employment relationship profoundly different from temporary work because of its
permanent character, and it is not to be considered atypical. Temporary workers are
basically young people hired on training/work (contratti di formazione e lavoro,
henceforth CFL), apprentices, and workers hired on fixed-term contracts (among
these numerous seasonal contracts). This definition comprises a notion of flexibility
that centres on the limited duration of the contract and the connected risk of insta-
bility (Anastasia and Maurizio 2002; Anastasia et al. 2004).4
Our study deals with Veneto, a region in the North-East of Italy which offers a
significant point of observation. It is a rich and dynamic region, with an important
manufacturing sector and a labour market close to full employment.
According to the Italian Central Statistical Office (Istat), in 2001 the quota of
temporary workers in the Veneto labour market was around 8% of the total
employee stock, which in absolute value was 102,000 employees in a total of
1,300,000 (Istat, Rilevazione trimestrale delle forze di lavoro—Labour Force
Survey, henceforth LFS). A similar ratio is reported for Italy as a whole. The figure
rapidly increased in the 1990s, both in absolute and relative values, and doubled
after 1993 (from 4 to 8% of total employment), with a yearly average rate of
4
Open-ended contracts may hide forms of precarious employment: as in the case of employers
who ask female employees to sign undated resignation letters so that they can be sure that the
women will leave with the onset of their first pregnancies. A survey by the Ministry of Labour
cited in Saraceno (2002) reports that 20% of female voluntary quits in the Northern regions of
Italy happen during pregnancy.
increase amounting to 5%, i.e. 5,000 employees per year. In the same years, OECD
countries showed no tendency towards an increase in temporary work (Anastasia
and Maurizio 2002; Anastasia et al. 2004).
Turning to flow values, temporary work has been absolutely dominant among
yearly hirings since the early 1990s, and this is the first reason for regarding
temporary work as signalling the prospective erosion of the stock of stable
employees, although stock values, which change at a slow rate, are still dominated
by open-ended contracts.
The official Italian figures on temporary work are rather low in comparison with
those for Spain and Portugal, two countries marked by the wide diffusion of temporary
labour, and they are below the levels of the large continental countries, Germany and
France, and of the Nordic countries, the Netherlands and Sweden. Temporary work is
more widespread in Italy than in the United Kingdom and Ireland, but these are
countries where the absence of protective legislation makes the use of temporary
labour much less interesting. Italy recorded the average OECD number of female
temporary workers (12%) in 2000, but a much lower figure for males.
The official Italian data on temporary work are taken from the LFS. As noted by
de Angelini and Giraldo (2002, p. 105, 2003) and Anastasia et al. (2004) regarding
the nature of the labour contracts of family members, the replies to the survey
reflected the interviewee’s (generally the head of household) self-perception of the
nature of the labour contract, rather than its legal nature. And the way in which the
interview was structured gave rise to significant bias in the assessment of tem-
porary work. For example, work/training contracts (CFL) and apprenticeships—
two widely used types of temporary contract—are often perceived as stable by the
interviewee because they are frequently converted into open-ended positions at the
end of the training period; all the more so if the interviewee is not the worker him/
herself, but a member of the family, who is not normally aware of the legal nature
of the relative’s labour contract.5
LFS estimates provide the basis for the Italian official data used in international
comparisons, and overall, Italian temporary work figures appear to be heavily
downwardly biased. The bias becomes very apparent if LFS data are compared
with administrative records for the same period of time and for the same geo-
graphical area. Administrative data in Veneto are provided by the Ministry of
Labour (Veneto Lavoro) and by the Veneto Worker History (VWH) panel com-
piled by the Department of Economics at the University of Venice (see Appendix).
5
Baretta, Leombruni, Trivellato, Rosati (Baretta et al. 2004) explain in detail the main problems
that arise when comparing administrative data and LFS data.
According to De Angelini Giraldo (2002; 2003), at least 40% of the apprentices interviewed
reported that they had permanent jobs, and 30% of temporary labour contracts were due to be
converted into open-ended contracts by the same firm. See Ministry of Labour (2003). The
author’s computations on the Social Security longitudinal panel yield a larger quota of
conversions for both CFL and apprenticeships.
According to these two sources, the number of temporary workers is more than
twice that counted by the Istat-LFS.
Table 8.1 reports the figures for Treviso and Vicenza (which have been kindly
made available to us by Veneto Lavoro) and the VWH figures: for comparable
sectors and data, the two sources are substantially consistent, taking into account
that VWH has only gradually included fixed-term contracts, and that the pro-
cedure used to measure CFL has probably produced a forward temporal shift in
the Veneto Lavoro dataset (Veneto Lavoro 2005). Both sources report a
temporary
Several activities in the private service sector are well known to be charac-
terized by unstable employment; and restricting the analysis to manufacturing—
construction excluded—appears to be a conservative measure According to the
VWH, temporary work contracts amounted in 2000 to more than 13.0%, which
was more than twice the proportion of temporary workers estimated by LFS for the
comparable 2000 population (5.0–6.0%). Veneto Lavoro data for Treviso and
Vicenza are quite closely in line with the figures based on the VWH panel
(Table 8.2).
If the same correction suggested for the Veneto were applied at the national
level, Italy would rank just below Spain, and close to Portugal, among the
countries with the highest numbers of temporary workers, leaving Germany and
France well behind. With the significant difference that in Portugal and Spain the
number of temporary contracts is decreasing, while in Italy it is increasing: a
feature that makes the Italian situation all the more critical (Anastasia and Mau-
rizio 2002; Anastasia et al. 2004).
8.3 From Temporary Labour Contracts to Labour

Market Precariousness
Temporary labour contracts and short employment spells are not immediately
connected with each other: temporary contracts are often renewed and they pave
the way to more stable forms of employment. Yet temporary contracts charac-
terize the majority of workers that work for short spells. According to the VWH
data, CFL, apprenticeships and temporary contracts account for 67% of the
employment spells that conclude within 6 months; the remaining 33% concerns
workers hired on open-ended contracts which end de facto after 6 months (quits,
layoffs etc.).
With the increasing number of self-employed workers and new forms of short-
term contracts, the Italian labour market has undoubtedly developed towards a
larger number of flexible worker categories. As more forms of precarious work
become available and spread among workers, labour contracts considered unac-
ceptable by the trade unions a couple of decades ago, and of uncertain legality, are
now commonplace.
Table 8.1 Number of employees in manufacturinga hired on temporary labour contracts in Veneto. December each year
Year CFL Apprenticeships Fixed-term contracts Temporary agency work Others Total worker stock Temporary/stockb
Veneto VWH Veneto VWH Veneto VWH Veneto VWH Veneto VWH VWH Veneto VWH
Lavoro Lavoro Lavoro Lavoro Lavoro Lavoro
1996 21709 26293 465447 10.31
1997 19821 25989 463248 9.89
1998 20849 16675 30704 29375 23666 13104 450 252 463111 16.24 12.77
1999 15619 11946 32729 31331 25470 17396 1336 228 467259 15.80 12.98
2000 11716 8860 33305 33543 26844 21649 2866 207 479025 15.00 13.37
2001 8657 30486 22530 3267 164 12.85
2002 6467 27443 22362 4261 96 11.72
2003 4605 24834 23301 47 10.99
Veneto Lavoro: employment refers to the private manufacturing sector and to CFL, apprenticeships, fixed-term contracts, temporary agency work (intro-
duced in 1998) and home workers. Both the Veneto Lavoro and the VWH data are yearly stock data computed from flow histories at 31.12 each year. Data
have been kindly made available to us by Bruno Anastasia and Danilo Maurizio, Veneto Lavoro. www.venetolavoro.it
Source and method a Ateco 1981, 3 and 4 (Istat 2007)
b
The stock values are from VWH 1996–2000 and from LFS from 2001-2003
8 Labour Market Segmentation, Flexibility and Precariousness in the Italian North East
155
Table 8.2 Temporary worker quota in total employment

Manufacturing Total private sector
Year Treviso and Vicenza Veneto Treviso and Vicenza Veneto
LFSa VWH§ LFSa VWH§ LFSb VWHc LFSd VWHb
1990 17.92 3.34 18.55 17.30 5.00 16.35
1991 14.40 3.12 15.17 14.00 4.77 13.40
1992 11.22 3.37 12.15 11.10 4.90 10.91
1993 3.64 9.73 3.79 10.42 4.01 9.65 5.46 9.35
1994 4.68 10.30 4.74 10.98 5.37 9.95 6.67 9.44
1995 3.97 10.38 4.29 11.06 4.28 10.00 6.92 9.59
1996 4.42 9.77 4.91 10.31 4.69 9.65 6.81 9.23
1997 4.15 9.29 5.30 9.89 4.58 9.24 7.26 9.02
1998 4.51 12.04 5.19 12.77 5.19 12.40 7.47 12.80
1999 5.16 12.46 5.47 12.98 5.59 13.10 8.06 13.36
2000 5.17 12.79 6.23 13.37 5.85 13.50 8.87 13.83
Method § 1990–1997: temporary workers are apprentices and CFL; since 1998 workers on fixed-
term contracts have been added. Manufacturing: §Ateco 1981, 3 and 4.
a
Ateco 1981, 1 to 5. LFS manufacturing includes construction, where there is a large amount of
temporary work, so that our conclusions concerning the alleged LFS undervaluation of temporary
work are possibly reinforced. Total private sector
b
Agriculture excluded
c
Agriculture and public sector excluded
d
Agriculture and public sector included Source LFS data are not published by Istat at the
provincial level and have been kindly supplied to us by Anna de Angelini, Veneto Lavoro
Short employment spells have increased over time. Spells lasting less than
12 months increased from 6% in 1982 to 13% in 1996, and spells lasting between
12 and 24 months rose from 12% in 1982 to 21% in 1995.6
The number of short employment spells, and of seasonal spells, exhibits a
definite cyclical pattern, peaking when GDP per capita is high, as in 1989 and
1995, and declining in the low years, as in 1993. Short spells are not confined to
new labour-market entrants and have gradually affected more and more workers.
The increase in the number of short-term employment spells has several causes:
the increased number of CFL in the late 1980s; the doubling of apprenticeships in
the late 1990s as CFL declined; and the rapid increase in the number of seasonal
workers, who have very short work spells by definition (seasonal contracts trebled
6
Short spells include voluntary quits (by workers possibly hired on open-ended contracts) and
exclude renewals and conversions of temporary contracts into permanent ones: the conversion of
CFL into open-ended contracts is encouraged by the law and apprenticeships can be renewed up
to a maximum duration of five years.
Table 8.3 Treviso and Vicenza, employment spells (VWH)

Year Number of short employment spells/total employees
Manufacturinga Total private
0–12 months 13–24 months 0–12 months 13–24 months
1982 6.80 5.38 11.73 6.88
1983 6.46 4.84 10.98 6.07
1984 7.26 5.02 11.34 6.00
1985 9.10 6.01 12.71 6.77
1986 9.56 7.17 13.06 7.92
1987 10.99 7.97 14.67 8.54
1988 12.13 8.48 15.97 9.18
1989 12.95 8.71 16.48 9.46
1990 12.73 8.50 16.27 9.47
1991 11.03 7.77 15.20 8.94
1992 9.99 6.75 13.96 7.99
1993 8.52 6.19 12.30 7.36
1994 12.06 6.63 14.82 7.62
1995 15.05 7.66 18.21 8.40
1996 13.66 17.26
Short spells are spells at the beginning of the year plus new spells. Total employees are initial
stock + yearly per capita hirings
Method a Ateco 1981, 3 and 4
in 15 years, from 2,500 in 1982 to 7,650 in 1997).7 While most of the labour force
is employed in long-term jobs, there are numerous short-term jobs, and their
number has increased in recent years.
In the remaining part of the article, workers’ careers will be evaluated ex-post
according to the succession of employment spells, independently of the legal form
taken by the labour contracts of the workers concerned (Table 8.3).
Worker careers will be compared in relation to mobility among jobs and length
of time in the same job. Here ‘job’ is synonymous with ‘firm’.8 The analysis is
restricted to employees in Treviso and Vicenza working in private manufacturing
from 1982 to 1997: a population of 194,000 employees in 1982 which had
increased to 233,000 by the end of the period.
For our present purposes, employees are termed ‘movers’ or ‘stayers’ (Blumen
et al. 1955). Union of the two sets—movers and stayers—exhausts the population
7
Compared with other countries, in Veneto only around 15% of employees work less than
twelve months. The figures reported for Italy in international comparisons are likely to
underestimate the real Italian situation because they are derived from LFS-Istat. According to a
comparison conducted by Burgess (1998), 20% of employees (26-45 age class) in the United
States were employed for less than twelve months, 20% in Holland, 11% in France, 16% in
Germany, 8% in Italy, and 4% in Japan.
8
A reasonable assumption given that the average firm size in Veneto is very small: 13
employees.
Fig. 8.1 The sliding tenure

window (±T) centred in t
t-T t t+T
Fig. 8.2 The observations interval (1975–1997) and the sliding tenure window (±7 years) in the
bounded interval 1982–1990
set: stayers may be constantly employed in the same job from the outset, or they
may become permanent after some other employment episode, usually a sequence
of short spells representing the search process both by the worker and by the
employer (short spells preceding tenure). Alternatively, employees may move
from one short spell to another and never stabilize: short spells are ‘dead ends’ in
relation to the perspective-working careers, and workers that display this pattern
are labelled ‘movers’. The entire working life of a mover is made up of short spells
and is referred to as a ‘chaotic’ or ‘chequered’ working life.
In order to identify stayers and movers, tenure must be defined and measured.
The extended coverage of the VWH longitudinal panel enabled us to compute the
tenure directly for a significant number of years. The computation was performed
for manufacturing without construction. The complete tenure of length T in t was
defined if the employee in t was employed with the same employer in both (t-i)
and (t + T – i), i = 1,…, T.
The VWH dataset comprises information on working lives from 1975 to 1997
and the tenure length, T, is assumed equal to 7 years. This enabled us to measure
the number of stable jobs for the years 1982–1990 without encountering censor-
ship problems,9 1982 B t C 1990 (Tattara and Valentini 2002). The population set
was bounded to 27–54 years of age (the age range in which a worker is more likely
to develop a tenure). Figs. 8.1 and 8.2 show the tenure computation strategy.
9
A ten-year tenure would have shortened our window to a couple of years, 1986 and 1987. The
seven-year tenure has no particular meaning but is a compromise.
According to the definition of tenure, the worker population was split into the
following components:
Stayers: at least 7 years’ tenure in the same job
• from their labour–market entry
• after a succession of short work spells
Movers: less than 7 years’ tenure in the same job
8.4 Stable Employment
Comparative studies report that the USA is the country in which tenure is shortest,
6.6 years, while longer tenures are recorded in Greece, Italy and Sweden, followed
by Belgium, Japan and Portugal (Auer and Cazes 2000, p. 381; Dell’Aringa and
Piccirilli 2000). Less than one-year tenures are present in all countries, but they
represent an especially large quota ([20%) in the United States, Spain and
Denmark.
Long-term commitment to a single job is traditionally considered to be a
specificity of the Italian labour market and as resulting from protective labour
legislation.
In Veneto around 70–80% of employees aged between 27 and 54 have been in
permanent jobs for 7 or more years. At the end of the seventh year the probability
of a job break is rather low, and almost all jobs continue until the 10 year.10
The share of stable jobs in the employee population has declined over time,
while shorter employment relationships have increased. Jobs lasting less than
60 months have increased from 15 to 26% despite the aging of the population: a
trend that suggesting that the quota of stable workers in the employee stock has
increased.11
Table 8.4 shows interesting tenure specifications in relation to the population
aged 27–54. Gender does not seem to be relevant: both males and females are
stable to a similar extent. More interesting is the distinction according to educa-
tion. Education is not an entry in the VWH panel but can be identified indirectly.
The age of the employee in the year of entry into the VWH panel (entry not
compatible with the continuation of education12) is used to infer a divide between
primary and secondary (or higher) education. The label ‘primary education’ is
10
The probability of working three additional years with the same firm, after seven years of
tenure, is 75% for males. The probability of working three years with the same firm as that of first
employment is much lower: 44%.
11
The number of years, given the age boundaries, has possibly been more favourable to
employment in the more recent period, so that the conclusions about a decline in tenure are
further borne out.
12
Basically, no seasonal work or other short-term summer employment. For details see Canu
and Tattara (2005).
Table 8.4 Stayers (Manufacturing, Treviso and Vicenza, age 27–54)

Year Employees in thousandsa Stayers (% quota of the respective stocka)
Total Males Females White collars Blue collars
entering VWH entering VWH
[=19 years of age \19 years of age
Males Females Males Females
1982 115681 84.2 84.7 83.1 78.1 84.5
1983 114560 85.0 85.3 84.2 78.7 84.1
1984 114414 85.0 85.5 83.9 79.1 83.4 78.0 83.6
1985 116461 84.0 84.7 82.7 79.2 82.9 78.1 81.4
1986 119389 83.2 83.8 81.9 78.7 82.2 78.0 80.2
1987 122840 81.8 82.4 80.6 77.5 81.8 76.8 78.0
1988 127489 80.4 80.8 79.7 76.4 80.4 75.9 77.2
1989 134376 78.2 78.8 77.2 74.6 79.1 75.1 74.3
1990 142076 75.9 76.5 74.8 73.3 77.3 74.8 72.3
Method Ateco 1981, 3 and 4. The four last columns refer to an employee population (1990) of
6,342 F, 13,601 M, 8,002 F and 19,450 M
a
Initial stock plus yearly hirings
Table 8.5 Yearly quota of stayers (Manufacturing, Treviso and Vicenza, age 27–54)
Year Average firm size (Number of employees) at the beginning of the tenure
\50 C 50 \100 C 100 \200 C200
1982 70.4 83.7 86.8 92.1
1983 67.4 84.7 88.5 94.3
1984 68.4 85.8 86.6 94.0
1985 66.3 86.1 85.6 94.4
1986 65.8 86.3 86.0 94.2
1987 64.7 85.7 85.4 93.9
1988 64.2 84.7 85.1 93.8
1989 61.9 80.8 83.7 91.9
1990 60.0 78.3 81.5 91.4
Method see Table 8.4
attached to all blue collars entering the archive before 19 years of age, while white
collars entering after 19 years of age are attributed a secondary education. This
assumption is grounded on the idea that the Veneto labour market has been in full
employment since the early 1990s, so that the interval between ending formal
education and starting work as an employee is extremely short (Table 8.5).
Nothing is said about blue collars entering the employee archive at the age of
19 years or over, or about white collars entering the labour market before 19 years
of age, so that the result is a subset of the total population. Females with lower
formal educations have tenures which are much shorter than both the average and
that of females with higher formal educations.
Large firms have a larger quota of stayers by definition because larger units
internalise many job changes which appear as tenure breakdowns in small firms.
Moreover, small firms have high birth and high mortality rates, and this makes
stability less likely. Nonetheless, tenure is very significant in small firms as well,
and this is of specific importance in our two provinces, where firms with fewer
than 100 employees account for 73% of the entire employee population.
The stayer quota displays an overall declining pattern over time. The general
trend is independent of job grade (white or blue collar), gender, and firm size:
tenure decline characterises small and medium-sized firms (50 \ employ-
ees B 100) more than it does larger ones ([200).
Stability is generally preceded by a series of short-term spells, on average two
or three, which take place in a period of approximately 2 years.13 The bi-modal
distribution of working life between many short spells and a subsequent long spell
(tenure) is typical of males.14 Women have relatively uniform and longer spells.15
With the passage of time, the difference between the genders tends to disappear,
and females exhibit the short and repeated spells of males.
8.5 Movers
The rest of the labour market consists of unstable labour. Movers are workers that
have never significantly stabilized during their working lives.16 Movers are defined
as employees aged 35–54, i.e. of an age more favourable to the constitution of a
stable employment relationship, who in the period 1975–1997 had no continuous
job lasting 7 years or more (considering all the work spells available to them, jobs
in firms outside Veneto included). We assume it extremely unlikely that a
35–54 year-old worker with no tenure during the 22-year 1975–1997 window
would stabilize thereafter, and his working life has thus been marked by protracted
13
Pre-tenure months are truncated at 120. Few cases refer to workers that work continuously for
120 months with the same firm, and the tenure starting year, 1982 or 1990, in fact represents a
transition from stable employment to stable employment. The pre-tenure period is assessed on the
entire population, including employment spells undertaken outside the territory of Treviso and
Vicenza and in all private sectors.
14
Pre-tenure spells are computed on a population aged 25–30. Males have pre-tenure periods
shorter than those of females (the difference is around ten months) with a larger number of
contracts with different firms and a definitely shorter average spell length. The average waiting
period in pre-tenure status was 2 years in 1990, independently of gender. In 1990 males had on
average 3.5 pre-tenure employment spells per capita, while females had 3. In 1982 the average
pre-tenure spell was longer: 30 months for males and 44 for females. Because females had
lengthy spells, the number of spells was smaller (2.1 females and 2.9 males). As time elapses
females reduce their pre-tenure average duration from 44 months to 39.
15
This does not imply that the bulk of pre-tenure working time is evenly distributed among all
workers: individual differences are marked.
16
The definition is independent of the labour contract at the reference date.
Fig. 8.3 Number of working spells (Y axis) in relation to their average duration (X-axis).
Female movers (left) and male movers (right). Number of months (average working spell) in total
private employment
instability. The analysis is restricted to manufacturing (Ateco 3 and 4) in Treviso

and Vicenza.
Movers are strictly defined so as not to confuse them with workers who work
short spells which afterwards lead to a tenure.
Are movers really workers with chaotic careers, or are they just workers on the
borderline of the stayer’s definition? Do these workers embody a potentially stable
relation or do they form a quite different category? In the following analysis
we exclude employees close to the stayer definition (i.e. workers with two working
episodes with an average duration greater than or equal to 5 years) from the
candidate movers. And we exclude very short movers as well, although for a
different reason, namely that very short episodes are liable to be confused with
temporary commitments—commissions, service on examination boards, bonus
committees, etc.—which do not substitute for a open-ended labour contract but are
mostly additional to it (1/3 of the total is discarded). The circled area in Fig. 8.3
represents the ‘bulk of authentic movers’: people with work episodes ranging
between 3 and 14 in number and with an average duration of between 6 and
30 months. The average number of working spells lies between 7 and 10, and the
single spell average duration between 17 and 20 working months.
These are employees with chequered careers. The spell distribution is rather
even, and the average spell value and the average number of spells represents the
behaviour of the majority of employees.
Movers account for a significant quota of employees in manufacturing for the
relevant age cohort. Movers are counted by summing work spells, and they are
related to the employee population in the same period in Tables 8.6 and 8.7. Their
number varies between 14% and 22% of the total. Movers have a definite gender
and professional specification because the larger quota is made up of females and
by lower-educated persons. The divide is clear and stable over the entire period.
It highlights a structural segmentation of the employee labour market in manu-
facturing which is not usually taken into due account and is worth considering.
Education is significant for both males and females: among workers with lower
educations, movers are double the number of those with secondary educations, and
the divide seems to be increasing markedly over time.
Table 8.6 Movers in manufacturing in Treviso and Vicenza, age 35–54

Year Work spells Movers (% on yearly flowsa)
Total Males Females White collars entering Blue collars entering
VWH C19 years of age VWH \19 years of ageb
Males Females Males Females
1982 116759 13.8 12.1 17.1 14.18 10.68
1983 115310 12.4 10.9 15.2 12.86 11.12
1984 115141 12.1 10.9 14.5 12.06 9.60 13.81 9.96
1985 117168 12.2 11.0 14.5 11.01 8.71 15.24 11.23
1986 120164 13.0 11.9 15.1 10.52 8.00 16.51 11.77
1987 123822 14.2 13.3 15.9 10.38 7.30 17.52 13.32
1988 128728 15.6 15.1 16.6 10.62 7.79 19.06 14.11
1989 136474 18.6 18.2 19.3 11.69 8.06 22.11 16.91
1990 144418 21.8 21.5 22.4 12.21 8.62 23.42 18.97
a
Column 2
b
Age 27–54
Method Ateco 1981, 3 and 4. Yearly movers are measured by the number of work spells per-
taining to people labelled ‘movers’. The number of employees and the number of work spells
differ because employees who move are often the same in different years, and, on average,
movers have several work spells in the same year. Work spells pertaining to movers in 1990 are
1531 M, 405 F, 3832 M, 2458 F for the last four columns
Movers are more common in the apparel, leather, furniture and food industries.
Apparel has a large female quota and the tanning industry (part of the leather
sector) employs numerous immigrants, which form a highly unstable component
of the labour force.
The rate of increase of movers is high and positive for most sectors as time
elapses, and movers overflow into sectors previously excluded, like mechanics and
plastics (moulding). Movers are not important in machine production, where the
demand for high specialization and the required learning time are possibly greater
than in most traditional sectors. As to be expected, movers are much more sig-
nificant in small firms, although their quota stabilizes at just under 50 employees.
Movers are mainly low-wage, low-educated, precarious workers. Sample
restrictions have prevented the inclusion of highly-qualified workers and managers
that jump from job to job seeking better salaries. The working lives of movers can
be described with the notion of the chaotic career, that is, a working life with a
chequered trajectory, where the term ‘chaotic’ has a distinctly negative meaning.
While ordered careers are accompanied by strong integrating elements, chaotic
careers, owing to high worker mobility among different jobs—particularly when
movers occupy the bottom level of the market—prevent professional learning pro-
cesses and induce workers’ isolation. The creation of a solid relational network is
prevented and, as time passes, the impoverishment of human capital and the debase-
ment of social relations reduce the chances of moving to a better job (Bianco 2004).
We constructed different careers for movers and stayers by taking the entire
working lives of movers into account. In what follows, we shall refer to the
‘representative’ permanent mover as the average mover: that is, someone who
164
Table 8.7 Mover work spells in manufacturing in Treviso and Vicenza, age 35–54 (% on yearly flows)
Year Ateco 1981 Average firm size (number of employees) at the
beginning of tenure
31 Metal 32 Mechanics 41 Food-bev 43 Textiles 44 Leather 45 Apparel 46 Furniture 48 Plastic \50 C 50\100 C100 \200 C200
1982 10.35 11.16 12.99 6.77 17.96 17.92 13.10 15.35 19.66 11.14 9.50 5.40
1983 8.50 9.09 12.81 6.05 16.67 16.09 11.02 11.79 17.27 9.62 7.78 4.57
1984 7.59 7.83 12.67 5.96 14.74 14.74 9.51 12.37 15.63 8.71 6.80 4.11
1985 7.96 6.43 12.94 5.84 14.18 13.96 8.38 11.38 15.20 8.28 6.53 3.44
1986 7.82 5.15 12.00 6.11 15.17 13.73 8.20 10.93 14.99 8.07 6.24 3.06
1987 8.29 4.87 11.26 5.73 15.71 13.92 8.29 10.97 15.18 7.94 5.94 2.83
1988 9.55 5.27 12.41 5.64 17.20 13.78 8.87 11.07 16.10 8.02 5.97 2.58
1989 11.44 6.04 13.85 6.67 20.88 15.25 10.50 12.59 18.08 9.08 6.98 3.14
1990 13.37 6.47 15.97 7.80 22.80 16.57 12.55 15.20 20.09 10.28 7.83 3.66
Method see Table 8.6. Firm size and sector are measured at the beginning of the labour spell. The population numbers (first eight columns) in 1990 are:
6,853 (31), 1,934 (32), 906 (41), 4,035 (43), 2,455 (44), 5,600 (45), 3,220 (46), 1,504 (48)
G. Tattara and M. Valentini
Fig. 8.4 The working Working

episodes Males
careers of stayers and movers. duration.
Months
Males
202,176
Mover
192
Stayer
Interval between
successive
168 employment spells
144
120
134,114
140,114
96
72 118,65
75,63 131,65
83,63
48 75,45
88,45
34,22 43,27
24 22,22 57,27
12,12 28,12
0 24 48 72 96 120 144 168
number of months
works five periods if male, four periods if female, with an average duration of 18
months divided by long periods of non-employment. Female non-employment
intervals are twice as long as those of males.17
The relative working spells for a mover were computed by taking account of all
possible employment spells in every sector and in every firm located in and outside
Treviso and Vicenza. Mover self-employment spells have not been considered
because few workers had experienced such episodes.
Figures 8.4 and 8.5 show the number of months worked (vertical axis) as time
passes (time on the horizontal axis: worked and non-worked episodes in sequence).
The 45 line represents the working life of a permanently employed person. The
segments parallel to the 45 line represent the series of employment spells; the
horizontal shifts away from the 45 line are the number of non-employment
17
The representative mover is an ideal type. A set of representative movers was identified in the
entire VWH population: 40,000 workers were selected and their average numbers of spells were
computed: 5 for males and 4 for females.
In order to compute the duration of each single episode in the work spells sequence, the birth
cohort was restricted to the interval 1955–1960 (around 10,000 individuals) so as to avoid a
possible left censorship. The average of the durations of the individual episodes, according to
their place in the sequence, was rounded up to the nearest integer. The same procedure was used
for stayers, who amounted to around 12,000 individuals.Mover and stayer wages were the
average wages for the respective sets. They are expressed in real terms through the cost of living
index.
Fig. 8.5 The working Females

careers of stayers and movers. working
episodes.
Females dutarìtion. Mover
Months Stayer
interval between
employees successive
employment spells 187,158
187,247
144
120
96 110,97
126,97
72 141,79
96,58
48 120,58
42,42 55,42
76,34
24 54,34
15,15
35,15
0 24 48 72 96 120 144 168
number of months
months, put in chronological order. The figures illustrate the series of employment/
non-employment spells for stayers and movers: time is limited to approximately
15 years, a period sufficient for efficacious description of large part of the career of
the average permanent mover, either female or male.18
Permanent movers have long waiting periods between one employment spell
and the next; the waiting periods are of approximately the same length for males,
but they increase as time passes for females: in other words, the sequencing of
periods of employment by movers does not increase their employment prospects
but possibly damages them, particularly in the case of females Conversely, stayers
have very short waiting periods between two successive employment episodes: the
duration of the employment period is on average four times longer than that of the
preceding non-employment spell for females, and seven times longer for males.
Over 15 years, male stayers on average total 16 months of inactivity relative to
three or four job changes that can be considered frictional periods of non-
employment. The inactivity periods between successive jobs for permanent
movers amount to 72 months, i.e. 6 years in a total working career of 11 years:
non-employment is a basic element in the permanent mover’s working career. The
time spent in inactivity by stayers, in relation to worked time, declines positively,
in particular for males, as new working episodes accumulate (from 12 to 8 to
6 months in Fig. 8.3), while movers exhibit a less clearcut pattern.
Different career perspectives can be evaluated in terms of the incomes generated.
Although social security data on wages are a matter of considerable debate,
they represent a unique source of information: they are recorded in VWH and
are carefully exploited here. VWH wages are probably contractual wages, not the
18
12,000 stayers and 8,200 movers, born in 1955–1960, 30–55 years of age.
300
stayer
mover
250
200
150
100
50
0
1 15 29 43 57 71 85 99 113 127 141 155 169 183 197
number of months
Fig. 8.6 Labour incomes according to the number of months worked in manufacturing. Males
actual remuneration paid to workers: the number of declared worked days may be
less than the number of actual days worked (to appear coherent with the con-
tractual wage paid), and overtime is not (usually) declared.19 The first element can
be dealt with by considering only spell episodes greater than or equal to 12 months
for stayers (with a range of working days between 290 and 320) and monthly
intervals for movers (the monthly wage is divided by the number of days worked).
The comparison between stayer and mover wages is restricted to work episodes in
manufacturing (Ateco 3 and 4): although this drastically reduces the number of
episodes, it makes the comparison more significant because stayer wages in
manufacturing are meaningfully compared with mover wages computed in relation
to their work spells in manufacturing alone.20 Wages are expressed at constant
1995 prices (Table 8.8).
Male wages are generally higher than female wages; stayer wages—for both
males and females—are higher than those of movers, with a wage gap of around
15%. The wage difference is larger for females. The main reason for the difference
between stayer and mover wages is that movers never progress in their careers.
Average wages for movers and stayers are multiplied by the time spent as
employees so as to provide a rough visual measure of the difference in earned
income. The result of the two elements—lower wages and fewer periods worked—
is rather low work incomes for movers compared with those of stayers. This is
illustrated in Fig. 8.6 and 8.7 for both males and females. The horizontal axis
19
On the appropriateness of using social security data on wages to represent the actual
remuneration paid to workers, see Ginzburg et al. (1998; 1999), Gavosto and Rossi (1999),
Contini et al. (2001, 2002). The Italian social security records provide data for total wages paid
but do not detail the hours worked. Hence it is difficult to determine whether overtime, and how
much of it, has been included.
20
We have excluded managers, whose salaries are so different and so variable that the inclusion
would distort the average.
200
stayer
mover
150
100
50
0
1 16 31 46 61 76 91 106 121 136 151 166 181 196
number of months
Fig. 8.7 Labour incomes according to the number of months worked in manufacturing. Females
Table 8.8 Average weekly gross wages of movers and stayers in manufacturing
Employment successive Wages at 1995 prices, in Euros
spells
Stayers Movers
Malea Femaleb Malec Femaled
Mean Std.dev. Mean Std.dev. Mean Std.dev. Mean Std.dev.
1 293 63 253 52 276 87 228 64
2 294 75 260 64 287 110 225 65
3 313 114 258 69 306 126 233 81
4 325 121 0 0 320 150 222 68
5 313 134
Method Ateco 1981, 3 and 4. Average number of workers: 4704a , 2725b , 1585c , 1215d
measures the number of months (worked and non-worked episodes in sequence),

the vertical axis cumulates the monthly real wages earned for each month worked
so as to provide the total earned income referred to the respective month measured
on the horizontal axis (Table 8.8).
8.6 Towards More Precariousness?
The increase in inequality in Veneto has been discussed in light of the distinction
between the new flexible ‘non-standard’ patterns of employment and the tracdi-
tional Italian full-time open-ended labour contract. Non-standard patterns of
employment or atypical labour contracts have been on the government agenda, and
they have given rise to reforms which have substantially increased the number of
atypical contracts (Tursi 2004; Accornero 2006).
Our research has provided conclusive evidence that the official Italian statistics
grossly underestimate the number of people employed on atypical labour con-
tracts: a more accurate account of the various forms of short-term contracts should
more than double the official figures, ranking Italy among the European countries
with the largest amounts of temporary work. The number of atypical labour
contracts has increased rapidly over time, and although the increase seems to have
halted in recent years, the erosion of permanent employment]over time is very
apparent. More thorough examination of the dynamics of the Italian labour market
would have provided evidence that temporary labour contracts were widespread in
Italy, and that there was no need for labour-market reforms to foster their further
diffusion. Other aspects of the labour market, primarily the Italian anomaly of the
absence of universal unemployment benefit, should have been addressed directly.
Do repeated spells of temporary employment lead to more permanent jobs and
better working conditions in the future, or should they be considered as dead ends?
Training contracts represent the majority of short employment spells. They enable
young workers to ‘shop around’ for better matches, and they often develop into
permanent careers. But there is a substantial and increasing quota of mature
workers—movers—for whom short working episodes are a permanent situation of
precariousness and low income that lasts for a considerable number of years.
Movers are workers at the bottom level of the market, blue collars with low
educations, and mainly females. They repeatedly enter and exit employment; they
never stabilize and their situation worsens as they grow older.
The recent spread of new forms of temporary employment among mature
workers has exacerbated the recourse to short employment spells—chequered
careers—and the cost of this new pattern of employment, in terms of both income
and human capital loss, is possibly much larger than the benefits that can be
expected from greater labour-market flexibility—if flexibility can be considered an
issue in the contemporary Italian labour market.
Appendix: The VWH Database
The ideal dataset for analysing the divergence between worker and job flows is pro-
vided by the universe of employers matched by the universe of workers, because job
flows are defined on the employer’s behaviour over time. We have been able to exploit
a long panel of such data. The longitudinal panel used in this study has been con-
structed from the administrative records of the Italian Social Security System (Inps)
and is compiled at the Department of Economics, Venice University. It concerns the
entire population of employees and workers in two provinces, Treviso and Vicenza, of
the Italian region of Veneto. The database covers every firm and every individual
employed in the private sector (not, with few exceptions, the state and local govern-
ment) except for self-employed workers, farm workers, and people not earning wages.
For almost a decade, the Veneto labour market has been characterized by
almost full employment and by a positive rate of job creation in manufacturing, in
contrast to a negative national rate. It is a dynamic manucentric area, with a large

population of small firms; the average firm size is thirteen employees. The stock of
manufacturing workers in the two provinces of Treviso and Vicenza has varied
between 194,000 employees in the early 1980s and 233,000 employees in 1996,
with a yearly positive average rate of variation of 1.4%. The average rate of
growth in employment is the result of a marked increase in white collars and
female workers (Occari et al. 1997).
The Veneto longitudinal panel has records on establishment and worker flows
from 1975 to 1997, a rather long period of time compared with other studies of the
same kind; employers are classified with the three-digit Ateco 1981 standard
classification.21
The VWH data include register-based information on all firms, and on all
employees hired by those firms for at least one day during the period of observation,
independently of the worker’s place of residence.22 The unit of observation is the
employer-day. These items of information are used to build a monthly history of the
working life of each employee. Employers are identified by their identification
number, which changes if ownership, in the strict sense, changes. This has been
amended, and whenever more than 50% of all employees are taken over by the new
legal employer, the employment spell is considered to be continuing. Similarly, if
there are short breaks in the employment spell, as long as the worker continues at
the old employer, his/her spell is considered to be uninterrupted.23
Data include all individual employment spells with an employer, of whatever
duration, and this has probably produced a large number of very short spells.
Although short spells characterize the average job, they are concentrated at a
young age, whilst long spells characterize the mature worker’s current experience.
All plant sizes have been considered, because Veneto is characterized by a mul-
titude of very small production units (firms with B5 employees account for almost
12% of total manufacturing employment).24
21
Revelli (1995) and Rapiti (1998). Strictly speaking, the term ‘establishments’ should be used,
and not firms, because social security contributions can be paid at the establishment, although the
payments for different establishments can be united on demand (and the database seeks to unify
scattered payments through detailed study of the most relevant situations).
22
The entire working lives of all employees that have worked at least one day in Treviso and
Vicenza has been reconstructed by considering employment spells outside Treviso and Vicenza
as well.
23
A ‘cleaned’ social security archive has been used. Engagements/separations and creations/
destructions due to a change in the unit paying the social security contributions and not matched
by a corresponding change in the working population assessed at the firm level have been defined
as ‘spurious’ and have been deleted. The complex matching procedure – which is common
practice when working with social security data – is explained in Occari and Pitingaro (1997). For
a similar procedure, see Bingley and Westergård-Nielsen (2002).
24
The absolute importance of small firms impedes comparison with other countries: for
example, in Veneto the percentage of employment in firms with C100 employees is 27%, while
in Denmark it is more than 40%, and even larger in the United States. On the uncertain meaning
of mobility measures for small firms see Tattara and Valentini (2003).
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Part III
Part-Time Employment, Working
Conditions and Job Attributes
Chapter 9
Quality of Work: The Case of Part-Time
Work in Italy
Brendan J. Burchell
9.1 Introduction
While the rate of part-time work has been consistent in the EU15 in the period
2000–2005, Italy has seen a large rise in women’s part-time work over that period.
The likely cause of this rise in women’s part-time work is presumed to be the
Italian enactment of the EU Part-Time Work Directive (Faro 2004). Before 1984
Italian legislation had little provision for part-time work, and the Italian rate was
well below the European average. But, the weak 1984 legislation was repealed by
the then-conservative government to make way for the new directive adopted in
2000, and subsequently revised. As well as providing a clearer legislative
framework on issues such as flexible working by part-timers, part-time work was
claimed to offer important solutions to the Italian labour markets including
reducing unemployment, increasing women’s employment and enhancing
flexibility.
Understanding the nature of part-time work is central to understanding current
European labour markets, and planning for the labour markets deemed desirable
for the future. Part-time work is particularly fascinating for a number of reasons
that will hopefully become apparent in this paper, as it cuts across debates on
employment, work-life balance gender and families.
There is no universally agreed stance on part-time work. Some, perhaps coming
from a traditional trade-union background, see part-time work as a form of non-
standard work which is a threat to standard employment rights. Other feminist
researchers view part-time work as a ghetto which diverts women from competing
with male employees and maintains their lower status in the labour market.
B. J. Burchell (&)
Department of Sociology, University of Cambridge, Free School Lane,
Cambridge, CB2 3RQ, UK
e-mail: bb101@cam.ac.uk
176 B. J. Burchell
By contrast, some groups have traditionally been strongly supportive of part-time

work. ‘Conservative’ or ‘traditional’ views on gendered roles for men and women
see part-time jobs (but not full-time jobs) as acceptable for women with child-care
responsibilities. Recent concerns to increase work-life balance of families tend to see
part-time jobs as having an important role that permits women (and perhaps men
too) to maintain their career whilst combining employment with domestic work.
And as the male-breadwinner model declines, part-time employment at both ends of
the employment spectrum has become an increasingly important feature for students
and for older workers making the transition to retirement. And EU, for instance
through the Lisbon summit, tends to see part-time work as an important tool to
increasing women’s participation in the labour market (Kok 2003).
Rather than starting from a ideological position, this paper takes a pragmatic
and empirical approach to assess the quality of part-time and full time employment
using existing European datasets.
But, first, the paper will examine the various definitions of part-time research
employed by researchers, and then look at the prevalence of part-time work in the
old EU countries.
9.2 Definitions of Part-Time Employment
Because there are national differences in the normal weekly hours of work for full-
time jobs, and different institutional arrangements for setting such norms, there is
no simple, universally agreed and unproblematic threshold to separate part-time
workers from full-timers. Instead, setting such a definition in terms of hours is only
one of three definitional frameworks commonly employed. They are:
1. Objective hours. If an objective threshold is to be used, a figure of 30 or 35 h per
week is typically used. These are low enough to be below the normal full-time
hours in a country like Sweden with norms of short hours, but long enough to
classify, for instance, someone working 4 days a week in a high-hours country
(such as the UK) as a part-timer. Even then there are problems. For instance, if a
part-timer works overtime, is it appropriate that they then become classified as a
full-timer, or should it be the contracted hours of work that count?
2. Subjective definition. As the defining features of part-time work vary between
countries, hours of work alone may not be sufficient or accurate as a way to define
employees. So another approach is to ask them directly ‘‘Are you a full-time or
part-time employee?’’. Typically, if they ask for clarification from the interviewer,
they may be given some guidance in answering the question, including an hours
threshold if they explicitly request it. This is the approach taken in the Labour Force
Surveys, but wording varies between countries to reflect local norms.
3. In some cases, it is the contract of employment that is most important to
differentiate part-time and full-time employees. This is particularly important
where those with part-time contracts are explicitly excluded from employment
protection legislation.
9 Quality of Work: The Case of Part-Time Work in Italy 177
A further measurement issue arises if part-time workers are themselves further

sub-divided into categories. For instance, some researchers have differentiated
‘‘substantial’’ part-time work from ‘‘marginal’’ or ‘‘mini-jobs’’. Again, a useful
threshold for such a division will vary between countries, but 16 and 8 h are often
used. Such thresholds can be important, as some benefits and legal protections are
denied to employees working very short hours in some countries.
Yet another problem arises in the analysis of part-time work: individuals who
have several part-time jobs. This will not be dealt with in this paper, but it is a non-
trivial issue in some economies. Italy has a relatively low rate of multiple job
holders, unlike some of the central and eastern European post-transition countries.
9.3 The Prevalence of Part-Time Work
A comparison of the second, third and fourth waves of the European Working
Conditions Survey (Table 9.1) permits an analysis of the changing levels of part-
time work across Western Europe. Interviewees were asked ‘‘How many hours do
you usually work per week in your main paid job?’’ Here the number of hours was
split into ‘‘30 and below’’ and ‘‘31 and above’’.1,2
There was a general rise in the level of part-time work in the EU between 1995
(17.4%) and 2000 (21.0%), then a period of stability until 2005 (21.0%).
This pattern is similar for men and women separately: women’s rates of part-
time work increased from 31.4 to 37% then remained similar on 36.4%, men’s
rates in these 3 years were 7.3, 9.1 and 8.7%. But as Table 9.1 shows, the rates for
Italian women have increased dramatically in between 2000 and 2005, from 30 to
43%, but the rate for Italian men remained stable at 11%. The same trend, though
at different levels, is also evident from comparing part-time contracts in the Italian
Labour force data from 1993 to 2005, which also shows a dramatic rise in
women’s part-time employment compared to a small rise for male employees
(Istat 2007).
The other fact evident from Table 9.1 is that the country differences are large,
and there is no evidence of convergence over time. The Netherlands and the UK
had the highest rates in 1995 and continued to increase, but at the other extreme
Portugal started low and decreased.
It is beyond the scope of this paper to examine the cause of these European-
wide changes in the rate of part-time work, but it has been the focus of other
enquiries. For instance, Rubery (1998) concludes that where increases have
occurred it is ‘more of the same’ rather than employers developing new models of
1
The pattern of results in Italy and the EU is similar if the threshold is changed to 34 h, the
pattern is also similar using the European Labour Force Surveys variable that asks respondents
directly whether they work part-time or full-time (Fernández 2007).
2
For all of the statistical analyses where we imply that there is a difference between categories,
this difference is statistically significant at the 5% level or below.
178 B. J. Burchell
Table 9.1 The prevalence of part-time work (B30 h)

Sex of respondent Percentage of female Percentage of male
Country of interview 1995 2000 2005 1995 2000 2005
Belgium 30 43 42 8 11 11
Denmark 27 30 26 9 8 10
Germany 27 40 30 4 7 6
Greece 25 30 27 10 24 10
Spain 26 28 28 9 9 7
France 25 31 27 9 8 7
Ireland 28 35 47 6 8 9
Italy 28 30 43 9 11 11
Luxembourg 26 44 34 3 3 7
Netherlands 53 61 59 8 14 13
Austria 25 35 33 2 6 5
Portugal 16 21 12 7 5 5
Finland 15 19 22 9 7 11
Sweden 34 28 31 7 11 7
UK 48 47 54 9 8 13
Source: European Working Conditions Survey (EWCS)
Fig. 9.1 Part-time

employment in the EU, by
gender and age (% of total
employment), 2002. Source:
Eurostat Labour Force
Survey, 2002 (adapted from
Corral and Isusi, 2003)
part-time work. But this dramatic shift in Italian women from significantly below
to significantly above the EU-15 average seems to have been a direct result of the
EU-imposed Part-Time Working Directive. Unintentionally the effect has
increased the gender gap in part-time work, from a ratio of about 3:1 to about 4:1
female:male.
It is also clear that the function of part-time work for men and women in the
EU-15 is different. As can be seen from Fig. 9.1, part-time work for men is
concentrated amongst young men and retired men, and still at very low levels for
men between the ages of 25 and 64, but for women the rate of part-time work
increases monotonically with age. Women’s part-time work is closely associated
with childcare, but for men, part-time work occurs at those points in their lifecycle
when they are least likely to have childcare responsibilities.
As well as a clear association with age, some occupations are also working-time
specific. For instance, Table 9.2 shows that women’s part-time employment is
very under-represented in managerial jobs, but over-represented in less skilled
blue-collar work.
Table 9.2 Full- and part-time employment in the EU, by gender and occupation
Occupational status group Men Women All
Full-time Part-time All Full-time Part-time All
White-collar managerial jobs 59 5 64 30 6 36 100
White-collar professional jobs 44 7 51 29 20 49 100
White-collar clerical and service jobs 28 4 32 39 29 68 100
Blue-collar craft and related manual 79 5 84 12 4 16 100
Blue-collar operative/labour 57 8 65 18 17 35 100
manual jobs
All 50 6 56 26 18 44 100
Source: Fagan and Burchell 2002, Table 15
9.4 The Quality of Part-Time Work
9.4.1 Part-Time Employment and Health
The 2000 European Working Conditions Survey asks several questions of

individuals about their self-reported health, and its relationship to work. Table 9.3
compares several health variables between full-time and part-time employees,
separately for men and women. Although none of the differences are great, every
one of the measures of health and health-related absenteeism, part-time employees
fair better than full-time employees, and this is the case for both male and female
employees. So, from this evidence, part-time employment would seem to be the
‘healthy option’.
But a note of caution should be sounded before taking this conclusion as
unequivocal evidence. When comparing part-time with full-time employees, we
are not comparing like with like; there are many other variables such as age and
occupation that are also different, as was shown in Fig. 9.1 and Table 9.2. With the
exception of gender, in most cases this paper does not attempt to control for these
potentially confounding variables, so in this case (as in several others in this
exploratory paper) it may be that a multivariate or panel analysis would arrive at
different conclusions.
9.4.2 Part-Time Work as Temporary or Unstable Work?
In many literatures part-time work is discussed as a form of non-standard work, but

figures from the EU15 in 2000 suggests that this is questionable. For instance, if
one examines the types of employment contract held by part-timers, it is by no
means true that part-time work is always insecure. Figure 9.2 shows that 16% of
workers on indefinite contracts are part-time. The situation is very different in
180 B. J. Burchell
Table 9.3 Full- and part-time employment in the EU, by gender and health outcome
Men Women
Full- Part- All Full- Part- All
time time time time
Job affects their health in some way 62 55 61 61 53 58
Health or safety is at risk because of their job 32 25 31 24 19 22
At least 1 day due to health problems caused by work 10 7 16 12 9 10
At least 1 day due to other health problems 34 29 33 40 34 36
Compatibility of working hours with family and other 78 81 78 80 91 84
commitments (Percentage of respondents that answer
very or fairly well)
Source: Fagan and Burchell 2002
Fig. 9.2 Employees part

time (spontaneous answer),
by type of contract, 2000.
Source: Paoli and Merllié,
2001. Adapted from figure 34
some non-EU contries (for instance, Australia) where ‘part-time’ is almost

synonymous with ‘casual’, but EU legislation has increased dismissal protection
for part-time employees on the grounds that to discriminate against part-timers was
a form of gender discrimination.
But employment contracts are often only weakly linked to actual labour-market
behaviour; do turnover or tenure data suggest that labour markets are associated
with higher levels of instability? Table 9.4 below shows again, part-time jobs are
again associated with higher labour turnover, but the differences are again small.
For instance, 36% of part-time men and 33% of part-time women have been with
their current employer for more than 10 years (albeit not necessarily part-time for
all of that duration). These figures are not far below the figures for full-timers of 45
and 40% for men and women respectively.
Another characteristic of non-standard jobs is that employees often take such
jobs involuntarily because of a lack of suitable standard jobs; for instance very few
workers would choose a temporary or fixed-term contract if an equivalent job with
an indefinite contract were available.
Table 9.5 shows the reasons that employees give for working part-time. One
should always be sceptical when interpreting employees’ reasons for making
choices, as their choices are often heavily constrained by factors such as inade-
quate child-care or an unequal division of domestic labour. Nevertheless less than
13% of women gave the unavailability of full-time work as a reason for taking a
part-time job; for part-time men, the figure was significantly higher at 19%.
If one compares rates of involuntary part-time work across countries, the results
are quite paradoxical. One might have expected that where the number of part-time
Table 9.4 Employment tenure with company and in present job, by gender and full-/part-time
status
Men Women
time time time time
Short tenure
Employed in their current job for 1 year or less 18 32 19 20 28 23
Employed by the company for 1 year or less 18 32 19 20 27 22
Long tenure
Employed in their current job for 10 ? years 42 33 42 37 31 35
Employed by the company for 10 ? years 45 36 44 40 33 37
Average tenure
Average number of years in current job 8 4 8 6 5 6
(median)
Average number of years with the company 7 4 7 6 4 5
(median)
Source: Fagan and Burchell 2002, Table 11
Table 9.5 Main reasons for working on a part-time basis by gender, EU-15, 2002
Main reason Men Women All
Impossible to find a full-time job 19 12.8 14.1
Do not want to work full time 31 32.2 31.9
Involvement in education or training activities 23.6 7.6 10.9
Sickness or disability 5.9 2.4 3.1
Child and adult care 4.2 31.5 25.8
Other reasons 11.8 11.7 11.7
No reasons 4.5 2 2,5
Total 100 100 100
Source: Eurostat Labour Force Survey, 2002 (Corral and Isusi 2003, Table 4 )
jobs was low (for instance in Greece) these posts would be filled with employees
who had a strong preference for part-time work, but where the proportion of
employees in part-time work was large, then one might expect more women would
be forced to take part-time jobs because of a lack of choice. In fact the very
opposite seems to be true, that a higher prevalence of part-time work is associated
with higher levels of voluntary part-time work. For instance, at the two extremes,
involuntary part-time work is almost non-existent in the Dutch case (1.9%), but
very prevalent in Greece (42%). And Fig. 9.3 shows that between these two
extremes is a very strong linear relationship.
There are many things that could give rise to such a relationship. For instance, it
could be that in those countries where part-time rates are low, this is for a good
reason because part-time jobs are, for legal or historical reasons, of very poor
quality, so will tend to be taken only when alternatives are not available. But
nevertheless, it does suggest that the greater the familiarity of a society with part-
time employment, the more they are accepted as desirable jobs.
182 B. J. Burchell
Fig. 9.3 Rate of involuntary

50.00
part-time work, 2002 plotted
against rates of women’s Greece
Involuntary part-time work

part-time work for EU15 40.00
countries. Source: Figures Finland
taken from Labour Force

Surveys, Table 4 in Corral 30.00 Italy
and Isusi 2003 Sweden
Portuga France
20.00 Denmark
Spain
Belgium
Germany
Ireland
10.00
Austria UK
Netherl
0.00
0.00 20.00 40.00 60.00 80.00

Rate 2002
9.4.3 Job Satisfaction
The European Working Conditions survey has separate questions about satisfac-
tion with working conditions and satisfaction with work-life balance. In Table 9.3,
one can see that female part-timers are more satisfied with their ‘compatibility’ of
working hours with family and other commitments, with 9% of part-time women
expressing dissatisfaction compared to 20% of full-timers. For men the difference
is in the same direction, but much weaker.
And Table 9.6 shows that, in the more general question about job satisfaction,
part-timers expressed more satisfaction with their work than full-timers, and the
effect was again stronger for women than for men.
The social psychological literature on job satisfaction advises us to be cau-
tious about interpreting job satisfaction data too literally. In answering such
questions, respondents are making an implicit comparison, and therefore
employees with lower expectations about other jobs will express higher satis-
faction with their current job. For instance, we know that on many ‘objective’
criteria, men tend to have better jobs than women, yet as is commonly found,
and is replicated in Table 9.6, women are more likely to express satisfaction
with their jobs than men. There are several ways of getting beyond this
‘superficial’ satisfaction (Agassi 1982). For instance, one way is to ask: ‘‘Would
you be pleased if your son [daughter for females] were to have a job like
yours?’’. This question then gives responses which resemble more closely the
objective quality of jobs.
Another approach would be to get those employees who have held both full-
time and part-time jobs to choose which of their jobs they liked best. This question
asks them to explicitly compare real jobs, rather than to make a hypothetical
judgement about a job.
Table 9.6 Satisfaction with working conditions, by gender and full-/part-time status
Men Women All
Full-time Part-time All Full-time Part-time All
Very satisfied 23 25 23 24 28 25 24
Fairly satisfied 59 56 59 59 57 58 59
Not very satisfied or not at all 18 19 18 17 15 16 17
Satisfied
Total 100 100 100 100 100 100 100
Source: EWCS, 2005
One survey that permits this comparison to be made is the 1986 Social Change
and Economic Life Initiative dataset (Burchell et al. 1997). In this survey, of 1,022
UK adults aged between 20 and 60, they were asked about every job that they had
held since leaving full-time education. After they had listed them all in chrono-
logical order (with the assistance of the interviewer) they were asked ‘‘[of] all the
jobs you’ve ever had, which one was the job you liked best?’’ Just looking at the
data for women, one-third selected, as their best job, one that had been part-time.
This was the same proportion of all the jobs in the women’s work histories that
were part-time. Again, this is not unequivocal data, but it does again suggest that,
for women, part-time jobs are no less satisfying than full-time jobs.
Yet another suggestion that individual preferences favour part-time more than
full-time work comes from surveys of working time preferences (Bielenski
et al. 2002; Fagan 2003). When employees are asked how many hours a week they
would like to work (for the same hourly rate of pay) full-timers tend to say that
they would prefer to work slightly less than full-time (part-timers tend to say that
they would prefer to continue working part-time, but a few more hours a week).
9.4.4 Community-Friendly Work
In order to consider the quality of different forms of employment, one can go

beyond simply looking at the benefits for the individual employee. For instance,
one topic that has generated much discussion is the effect of women’s employment
on the educational attainments of their children (O’Brien and Jones 1999), with
controversial claims that children of mothers working part-time had higher levels
of qualifications at the age of 16 than children whose mothers worked full-time.
An emerging topic is the impact of employment types on communities, using
outcome variables such as rates of community activities or levels of social capital.
Putnam (2000) hypothesised that women out of the labour market might be an
important social-capital resource for societies, as they have more time for vol-
untary organisations. He therefore argues that the declining stocks of social capital
over the twentieth century might have been caused, in part, by rising female
participation in the labour market. But no empirical evidence for this hypothesis
was found by Putnam for the US or by Hall (1999) for the UK.
184 B. J. Burchell
But if one examines the rates of voluntary and community activities in the
European Working Conditions Survey (EWCS), there is evidence that
employees in part-time jobs have slightly higher levels of these types of civic
participation, and this effect is maintained in multivariate models when other
variables, such as children and occupation are controlled for (Kamerade and
Burchell 2004).
9.4.5 Part-Time Work and Career Development
In considering the quality of a job, one needs to consider not only the present but
also the future; for instance does the job have training and promotion prospects, or
is it a dead-end job or a ‘‘trap’’. This is a complex question that can be considered
from a number of perspectives. For instance, other research has suggested that
part-timers are not considered as seriously for promotion as full-timers. For some
managers there may be a perception that part-time work and the supervision of
others are mutually incompatible. For other managers, it is assumed that part-
timers have a low commitment to the organization, and are therefore unsuitable for
human capital investment through training for more responsible positions.
There is also another way to approach the relationship between employment
and career development. Kohn and Schooner (1983) suggests that some jobs are
challenging and lead to cognitive development or learning, which facilitates career
progression and an upwards spiral. In contrast, mundane jobs do not present the
opportunity for learning and lead to stagnation.
Table 9.7 shows that this may well be the case with part-time jobs. They are
less likely to be described as providing opportunities for problem-solving or
learning than full-time jobs, and more likely to be described as monotonous or as
not complex. Table 9.7 also shows that part-timers are slightly less likely than full-
timers to have received training through their employer in the past year. Part-
timers are more likely to describe their job as being below the skill level that they
are capable of, and they are only about half as likely to have supervisory
responsibility compared to full-timers.
It is perhaps puzzling that jobs described as mundane and below the skill level
of the employee should also have high levels of job satisfaction. One possible
explanation is that many part-timers have very challenging and intensified lives
outside of work, with many other responsibilities including housework, childcare
or part-time study. Perhaps one way of reducing the stress in the case of these dual-
role or multiple-role lives is to take a job that is easily within one’s physical or
mental capacity? Economists tend to use pejorative terms to describe such jobs as
‘‘dead-end’’ or ‘‘traps’’, but for the incumbents. they may experience such jobs as
being a liberating, permitting them to gain some of the social and economic
benefits of employment where the only realistic alternative for them, within the
current institutional arrangements, would be non-employment and social
exclusion.
Table 9.7 Characteristics of job content and % of workers receiving training, by gender and
full-/part-time status
Men Women
time time time time
Problem-solving
No problem-solving or learning 9 11 9 11 15 12
Some problem-solving or learning 24 33 26 26 31 29
Both problem-solving and learning 67 56 65 63 54 59
Task complexity
Monotonous tasks, no complex tasks 16 25 17 18 25 21
Both monotonous and complex tasks 25 18 24 23 14 19
Neither monotonous nor complex tasks 21 30 22 26 35 30
Complex tasks, no monotonous tasks 38 27 37 33 26 30
Matching of skills with job demands
The demands of my job are too high for my skills 9 5 85 9 5 85
The demands of my job match my skills 85 81 8 84 85 8
The demands of my job are too low for my skills 6 14 7 6 10 8
% who have supervisory responsibilities 25 12 24 17 8 13
% who received no training from their employer in 69 74 69 66 72 69
the last 12 months
Source: Fagan and Burchell, 2002 , Tables 16 and 18
Further considerations of the effects of part-time work on women’s longer-term

careers have been considered by several authors (e.g. O’Reilly and Bothfeld 2002
and Connolly and Gregory 2005). Such analyses are complex, and will differ
between different countries. Connolly and Gregory’s 20-year longitudinal analysis
of the UK 1958 birth cohort suggests that it is useful to hypothesise that there are
two different types of career trajectories for women that use part-time work. For
some women, more attached to the labour market, they make the transition from
full-time to part-time work as a way of coping with domestic work, but are then
likely to return to full-time employment. But for other women, they enter part-time
work from economic inactivity, and are then likely to leave the labour market
again when they terminate their part-time job. O’Reilly and Bothfeld (2002) use a
transitional labour market theoretical framework to analyze the conditions that
would permit part-time employment to simultaneously benefit employees, reduce
labour market inequalities and to promote flexibility for both employers and
employees.
9.5 Conclusions
If one starts from the premise that part-time work is a non-standard form of work
forced upon employees, mainly female employees, as a way of achieving flexi-
bility or depriving the workforce of their rights, then the evidence presented here
186 B. J. Burchell
makes surprising reading. Using many standard, and a few innovative, measures of
quality of employment, one finds that part-time work, more often than not, seems
to be superior to full-time employment (and this is generally true also for the small
minority of men who work part-time).
This paper concurs with the conclusions of other research that one of the main
drawbacks of part-time work is that it is less oriented towards an upward career
trajectory than full-time work. But even here, the differences in measures of
training and stimulating job content between full-timers and part-timers are not
great. Furthermore, these differences are certainly not intrinsic to differences in
hours of employment, so there is scope for interventions to improve the career
prospects of part-timers. The incentives on employers to do this will depend on
their reasons for using part-time contracts. If it is simply to cut costs, then it might
be an uphill struggle to improve personal development opportunities for part-
timers. But increasingly employers are using part-time work to retain valuable staff
and to keep their skills current through periods when they otherwise might not be
employed, such as when women have caring responsibilities for pre-school
children.
There are two other drawbacks that are not discussed in greater detail in this
paper, but that also need to be taken into account if one is to give a wider
assessment of the quality of part-time work: wages and pensions.
Some researchers have reported that, controlling for the type of work and levels
of human capital, part-timers are paid a lower hourly wage than full-timers. But
this wage-penalty is not consistent across European countries, being negligible in
some countries, but large in others.
Secondly, there may be longer term disadvantages of working part-time for a
significant proportion of a career. In welfare systems where the pensions are set
relative to contributions made over a lifetime, part-time employment may increase
the risk of poverty in retirement. Again, it depends what one is comparing it to; if
the alternative is unemployment or non-employment, then part-time employment
will be an improvement, but compared to full-time employment, part-timers will
again suffer a delayed cost.
One needs to be very cautious in generalizing about part-time employment in
the EU when the function and rates of part-time work vary so greatly between the
member states. Taking the evidence in this paper together, a quality-of-work
perspective finds much to commend part-time employment as a method of com-
bining labour-market activity with domestic work or other non-labour market
activities. But taking a lifecycle perspective, the picture is more mixed, with
evidence that it impedes career progression and perpetuates gender inequalities.
The increase in part-time employment for Italian women needs to be monitored
carefully; a short-term increase in the quality of life for Italian women and Italian
families might be followed by an increased gender gap as women’s career
advancement slows down, so increasing vertical gender segregation. The relatively
high rate of involuntary part-time employment in Italy should be of some concern,
and suggests that the quality of part-time work in Italy may still be lagging behind
other western European countries Or can regulatory mechanisms be found to
minimize the negative impact of part-time work on women’s careers? Given the
trend towards deregulation, and the fact that the increase in part-time work in Italy
has only really affected women, perhaps there is a genuine cause for concern that
part-time employment is a move away from gender equality in Italy.
Acknowledgements I would like to thank Catherine O’Brien for assistance with the data
preparation and Tindara Addabbo and Giovanni Solinas for valuable feedback on earlier drafts. I
would also like to thank the Aiel for the conference invitation that lead to this paper.
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Chapter 10
Does Part-Time Mean Part-Satisfaction?
Sara Depedri
10.1 Introduction
The increase in part-time jobs has characterized many European countries in

recent decades. This trend is mainly explained by the evolution of the regulation of
labour markets. Countries have promoted various forms of labour flexibility, both
with specific legislation and through deregulation and increase in the parties’
autonomy. The principal purpose of rendering the labour market more flexible has
been to respond to new organizational needs and competitive pressures. On the
other hand, flexible employment has the advantage of developing new job
opportunities and reducing the level of unemployment. Moreover, the tendency to
use part-time contracts is increasingly explained by changes in the demand and
supply of labour.
On the one hand, organizations require job flexibility, and they use part-time
contracts in order to satisfy specific production needs, increase production and
productivity, and compete on the goods market. On the other, workers may want
fewer working hours in order to meet family needs and other personal commit-
ments. Furthermore, part-time contracts should cater to a specific area of the
labour supply, where the participation constraint and the individual supply of
labour are characterized by lower numbers of hours supplied. In all these cases,
part-time contracts are efficient because they enable both parties to achieve their
goals (i.e. needs and constraints) and to maximize their (also social) well-being.
However, this positive view becomes controversial when part-time relation-
ships match the needs of only one contractual party. Part-time may be wanted by
workers but not be in the interest of the organization; conversely, the principal may
impose a reduction in working hours to the detriment of workers’ expectations,
S. Depedri (&)
Department of Economics, University of Trento, via Inama 5, 38100 Trento, Italy
e-mail: sara.depedri@economia.unitn.it
190 S. Depedri
needs, and incomes. Furthermore, when the working hours of employment

relationships are shortened, there may be negative consequences on both the
perceptions of workers and their performances. Linked to this last aspect, part-time
work may also reduce human capital accumulation, even when it is voluntary.
The final effect of part-time contracts is therefore controversial and should be
analysed in terms of its various possible impacts on the parties’ well-being.
This chapter evaluates part-time workers’ well-being through analysis of part-
time jobs in the social services sector. This sector of activity is of interest for two
reasons. Firstly, workers’ performances depend not only upon the amount of hours
worked, but also and mainly upon the effort devoted to job quality. Thus, workers’
effort should be judged in terms of relationships with clients, involvement in the
activity and in the mission of the organization. In this context, the provision of a
standard economic contract (or better, a transactional contract as defined by
Rousseau 1995) is insufficient because most aspects of the job and of the
employment relationship must be explained in psychological terms. This is clearly
the case of the emergence of psychological contracts, which meet the needs of
organizations and workers on intrinsic aspects, relationships, perceptions, and
beliefs, and which commit the parties outside the pure contractual aspects of
the job.
The other salient feature of the sector analyzed here is the composition of its
workforce. The sector is characterized by a large number of women and a high
percentage of part-time workers. The latter aspect permits the development of
analyses in which part-timers represent a significant portion of interviewees and
yields understanding of whether problems in the treatment and in the satisfaction
of part-timers compromise the performance of organizations and the sector itself.
The prevalence of women instead allows one to judge whether part-time jobs
satisfy their specific need for time to meet familial needs, or rather whether they
respond to organizational needs and dissatisfy both females and males.
The aim of the paper is to demonstrate by empirical means the main factors
influencing part-time workers’ satisfactions, doing so by investigating their per-
ceptions about their jobs, internal fairness, and the quality of the work. For these
purposes data from a survey conducted in Italy in 1998 on a sample of organizations
delivering social services will be used. Questionnaires were administered to 228
organizations, 266 managers, 2,066 paid workers and 724 volunteers (Borzaga
2000). Fifty-four of the organizations surveyed were public, while the others
included both for-profit (17) and non-profit (157) organizations, mostly of small
size. Most of the 2,066 employees were women, and belonged to the middle age
group (more than two-thirds were aged between 30 and 49). More than one-third of
the workers had upper secondary school leaving certificates, and 16.5% were
graduates. Tenure in the organization was generally rather short (however, to be
noted is that one-third of organizations had been in existence for less than 10 years).
The questionnaire for employees contained questions on workers’ satisfaction,
with regard not only to their work as a whole but also to some of its aspects which
can be grouped into intrinsic, extrinsic and relational. Furthermore, specific
questions were asked in order to investigate workers’ attitudes and motivation,
10 Does Part-Time Mean Part-Satisfaction? 191
perceptions of fairness, and perspectives on loyalty to the organization. The

following sections concentrate on these aspects, besides personal and professional
characteristics, in order to understand the differences between full-time and part-
time workers and to support the hypothesis put forward in the literature concerning
part-timers’ well-being and role within organizations.
10.2 The Controversial Evaluation of Part-Time

Employment
Part-time employment has been studied along two main dimensions. From a
macroeconomic perspective, part-time employment is interpreted as a way to
reduce unemployment and to increase labour-market flexibility. The analysis
focuses on international comparisons and evaluates interrelations among the use of
part-time contracts, labour markets, and goods markets. On the other hand,
microeconomic analyses seek to identify the determinants of part-time work
(Houseman 2001) and the consequences of flexible jobs (Barrett and Doiron 2001).
Close to this view, part-time jobs are evaluated in their ability to meet the needs of
organizations and workers. On the demand side, organizations estimate the
convenience to them of hiring part-time workers by comparing costs of invest-
ments in the selection and training of workers with the benefits accruing to their
productivity, and with the possibility of responding to demand peaks for their
products or specific requirements of the production cycle (Booth and Wood 2008).
Furthermore, organizations are attracted by part-time contracts according to the
national tax regime, the general regulation of part-time work, and specific
agreements with trade unions on wage levels and other rules and protections. The
supply side is instead characterized by individuals with heterogeneous needs and
preferences. Consequently, part-time jobs should respond to specific needs of
workers and satisfy this (marginal) part of the supply of working time.
At the same time, part-time jobs (as in general the excessive use of flexible
contracts) may negatively impact on the expectations and perceptions of both
employers and employees (Buddelmeyer et al. 2004). For workers, part-time con-
tracts may be imposed by the organization and must consequently be treated as
involuntary part-time. As a consequence, workers not only receive lower incomes
but are also dissatisfied with their working conditions. Furthermore, part-time work
is often associated with low career chances, accumulation of human capital, fringe
benefits, and other non-wage rewards. Workers may therefore perceive their jobs as
less secure, with negative consequences on their lives: the employment relationship
restricts workers’ expectations and decreases their opportunities, employees are less
prone to invest in their futures, to leave their families of origin, get married, or have
children (Fullin 2004). This is due to an increase in the perception of risk linked with
sociological investments, the overlap between the duration of work and life
perspectives, and mainly the limitations on freedom to fulfil personal ‘capabilities’—
i.e. ability to achieve the desired standard of life (Sen 1993).
192 S. Depedri
The main problems of part-time employment are thus related to involuntary

part-time work, unfair treatment compared with full-time jobs, and unexplained
penalizations with regard to career prospects and opportunities for vocational
training. The consequences of these perceptions are both direct on workers’ well-
being (i.e. level of satisfaction or utility achieved on the job) and indirect on their
performances. With regard to this last point, workers may perceive themselves as
less involved in the organization and not adequately rewarded and recognised.
Consequently, they do not internalize the organization’s goals and mission in their
decision-making processes; they reduce their effort in response to a perception of
unjust behaviour by the principal; and finally they may negatively influence the
quality or the quantity of organizational outcomes.
For organizations, the costs thus consist not only, as said, in specific invest-
ments for recruiting and training workers but also in the inability to control and
adequately incentivize part-time workers. In order to achieve increases in pro-
ductivity and better organizational performance, organizations must devise human
resources policies able to maximize their part-time workers’ satisfaction, involve
them in the organizational process, and improve internal fairness. Policies of
training rather than rewarding are a crucial aspect. Furthermore, organizations
must also develop complete psychological contracts with all their workers. As
defined by Rousseau (1995), a psychological contract consists in the perceptions of
the two parties regarding their mutual obligations. These obligations arise from
psychological and subjective perceptions, are mainly seen as ‘promises’ or as
‘expectations’, and are often informal and imprecise. This is because the
psychological contract mainly depends upon the interpretations and perceptions of
the actors, taking into account the other’s actions, the fairness of the treatment, and
the transparency of information. When one or more of these elements are lacking,
the psychological relationship is compromised and the behaviours of the parties
may deteriorate. And this risk is higher when the duration of the employment
relationship is shortened, because workers have fewer exchanges with employers,
colleagues, and the working environment itself.
The contraposition of positive and negative aspects of part-time employment is
therefore crucial. It should be evaluated by considering parameters relative to both
the effective treatment received by part-time workers and their perceptions and
psychological considerations. Furthermore, analysis should evaluate the impact on
both workers’ well-being and performances or the quality of the job. Finally, it
should determine the ability of part-time contracts both to respond to workers’ needs
for working time flexibility and to yield organizational comparative advantages.
10.3 General Characteristics of Part-Time Workers
The majority of interviewees were full-time workers, but also the percentage of
part-timers was significant (20.6%, equal to 422 cases), a little higher in private
than in public organizations (respectively 24 and 13.4%), and certainly larger than
in other sectors and in the Italian labour market in general. In order to understand
the characteristics of the sample better, it is useful to compare part-timers with
full-time workers (as in Table 10.1). This allows evaluation of whether workers
employed on part-time contracts have different personal characteristics that
explain the different needs of workers or the policies of organizations. Firstly, such
comparison confirms that females are more frequently employed on part-time
contracts (22.1 of females and 15.7% of males are employed part-time), but the
percentage of part-time males is neither close to zero nor significantly lower than
that of full-time workers (17.5 against 24.4%), given the characteristics of the
sector. The number of part-time workers is significantly higher for workers with a
degree (30.2%) and the distribution of part-time workers by level of education
progressively increases in comparison with the distribution of full-time workers.
The propensity of organizations to hire workers on part-time contracts and then
convert them into full-time relationships is confirmed by the higher percentage of
full-time workers employed in the organization for more than 10 years (25 against
11.9% of part-time workers) and the lower percentage employed for fewer than 3
years (respectively 45.9 and 28.9%). Secondly, in regard to workers’ age, part-time
contracts are applied to youngest workers in 28.2% of cases, while only 23.4% of
full-time workers are less than 30 years old. Moreover, even when one inspects the
entire sample, no difference emerges among workers with different civil statuses.
On distinguishing males from females, the data show that married males
are employed full-time in 91.5% of cases, while part-time contracts are more
frequently applied to singles (24.7%). Conversely, females are employed part-time
at a higher percentage when they are married (24.7%) than when they are
single (19.3%). These results confirm the hypothesis that part-time contracts are
mainly chosen by females wanting to meet family needs, while among males only
singles may accept this reduction of income (other than working hours). Another
explanation for choosing part-time jobs is the decision to engage in other activities,
specifically external voluntary work: the percentage of workers who are also
volunteers is in fact somewhat higher among part-timers (given their greater free
time) (22 against 16.2% for full-time workers), and this difference increases fur-
ther among males.
An analysis of the principal characteristics of workers’ positions in the orga-
nization and in the labour market (Table 10.1) shows that, firstly, workers
employed part-time are also more frequently employed on temporary contracts:
only 53.9% of part-timers are employed on open-ended contracts (81.1% of full-
time workers), while 29% have fixed-term contracts.1It thus seems that
1
Italian labour law has in recent years introduced a series of flexible forms of employment
which in general can be called ‘contingent contracts’. In regard to the specific question used in
the questionnaire, it is possible to distinguish between workers on fixed-term contracts and em-
ployer-coordinated freelancers. The former are employed as subordinate workers, while the latter
have para-subordinate contracts, i.e., are similar to self-employed workers. Nevertheless, given
that their roles in the organization and the temporary nature of the contracts are very similar, in
what follows they will be considered jointly as temporary workers.
194 S. Depedri
Table 10.1 Principal characteristics of part-time workers (per cent)

Variable Values Full-time Part-time
Type of organization Public 86.6 13.4
Private 76.0 24.0
Gender Male 24.4 17.5
Female 75.6 82.5
Educational level Compulsory schooling 25.9 31.1
Technical education 20.7 12.1
High-school diploma 38.8 33.7
University degree or higher 14.6 24.3
Age Less than 25 years old 5.8 6.8
25–30 17.6 21.4
30–39 39.1 42.2
40–49 26.4 21.1
More than 50 years old 11.1 8.5
Tenure in the organization Fewer than 3 years 28.9 45.9
3–5 years 21.2 23.0
5–10 years 24.9 19.6
More than 10 years 25.0 11.5
Civil status Single 31.6 32.2
Married 58.0 60.4
Divorced 8.0 6.0
Widowed 2.4 1.4
Voluntary work Not currently 83.8 77.0
Yes, occasionally 9.2 10.2
Yes, continuously 7.0 11.8
Contractual form Open-ended contract 81.1 53.9
Job training 1.6 3.6
Fixed-term contract 7.5 17.1
Freelance 2.2 11.9
Other contract 7.5 13.5
Area of activity Co-ordination 9.8 8.3
Supply of the service 74.2 71.9
Accounting 6.3 5.7
Human resources Management 2.4 3.6
Complementary activity 10.0 11.7
Other 7.0 12.9
Received training No training 45.5 50.0
Short-term training 32.4 31.4
Long-term training 22.2 18.6
Previous Employed 43.5 31.7
employment status Unemployed 27.6 26.9
Student 10.5 15.8
Housewife 9.7 13.9
Retired person 0.2 1.4
Other 8.5 10.3
Wage Monthly 832.21 551.30
Hourly 5.77 6.39
organizations offer flexible contracts both and simultaneously in terms of duration

and timing as forms of first-employment or first-hiring in the organization. Nev-
ertheless, this may increase the risk that part-time jobs are perceived by workers,
not as meeting their needs, but mainly as decreasing job security and as responding
to the preferences of the principal.
However, no discrimination between full-time and part-time workers emerges
in the assignation of roles and the provision of training. Workers on part-time
contracts are, in fact, employed in coordination and responsibility activities in
percentages very close to those of full-time workers. Differences emerge only
when the analysis distinguishes according to certain characteristics of workers and
the job. The presence of part-time workers employed in the direct provision of
services is higher (84.6%) in public organizations, which instead reserve roles of
coordination and management for full-time workers; private organizations record
similar percentages of full-time and part-time workers in different roles and
activities. As to gender, while females are similarly employed in different roles
when employed on part-time or full-time contracts, the percentage of males with
coordination and management roles decreases when they are employed part-time
(8.2% of the sample, against 17.9% of full-time workers). Consequently, it is
possible to claim that the social services sector and specifically non-profit orga-
nizations differ from the average treatment of part-time workers in the labour
market. They offer more career opportunities; or at least they do not specifically
discriminate between part-timers and full-timers when offering job opportunities.
The only differences in workers’ roles seem to be explained by the involvement of
part-time (mainly male) workers in initial training, without ruling out future career
advancement.
Nor does training significantly discriminate against part-time workers, since
organizations tend to invest only slightly more in preparing their full-time workers
(45.5% of them had received no training in the 3 years preceding the interview,
and this percentage was 50% for part-time employees). Nevertheless, all workers
enjoy a similar level of short-term vocational training (close to 32%). Differences
in training penalize part-time workers in private organizations (who receive no
training in 51.7% of cases) to a greater extent, while public organizations provide
specific training for most of their part-time workers (60.8%). Vocational training is
also reduced for males employed on part-time contracts (50.7% without training in
the 3 years considered) in comparison with their full-time colleagues (who
received internal training in 61.4% of cases). But the most evident difference
emerges in regard to graduates: 43% of graduate part-timers do not receive
on-the-job training, while this percentage is only 23.5% for full-time workers with
a degree, who instead received long-term training in 36.4% of cases.
Finally, pure economic treatment seems on average not to discriminate between
full-time and part-time workers: while monthly wages are obviously proportional
to the number of hours worked, the average hourly wage of part-timers is slightly
higher than that of full-timers. The explanation for this is not the better general
treatment of part-time workers, but the presence of two classes of part-timers. The
first consists of workers with lower educational levels (more than 50% with
196 S. Depedri
compulsory schooling), of the youngest or oldest age classes (aged under 25 or

over 50), and just employed in the organization or with little experience (35% of
workers with fewer than 3 years of tenure in the organization). This class is
characterized by low wages (9.7% of part-time workers earn less than 4 Euros per
hour, compared with 6.3% of full-timers). The second and opposite class consists
of workers with degrees (30% earning more than 10 Euros per hour) and belonging
to the middle-age class (from 30 to 40 years old), who earn salaries also signifi-
cantly above the average (more than 20% above 7 Euros per hour, compared with
7% of full-timers). The wage structures are thus equal in terms of how they reward
both specific education and training and tenure in the organization. No significant
differences affect salaries by gender, even if the average data cannot exclude wage
gender discrimination and must therefore be further analyzed. The linkage
between organizational form and wages is clearer, because private (specifically
non-profit) organizations offer lower salaries for part-time workers (with pay levels
very close to those applied to full-time workers, in order to select intrinsically
motivated people).
Turning to previous employment conditions, part-time workers are in a higher
percentage than full-timers, students or housewives (respectively 15.8 and 13.9%),
while the percentage of part-time workers with previous job experiences is lower
(31.7% against 43.5% of full-time workers). These few cases comprise a signifi-
cant percentage of self-employed people (24.2%, while full-time workers with
previous work experiences were subordinate employees in 84% of cases)with low
percentages of part-time workers with experiences as blue or white collars.
The explanations for job changes differ significantly between part-time and full-
time workers: the former have principally (and more than their full-time
co-workers) accepted a new job because it offered an opportunity to meet family
needs better (average score 4.42 on a scale from 1 to 7), while the wage was
certainly not an explanation for the change (average score 2.51). The importance
of having a more flexible job accounts for the change especially among married
people (assigned relevance of 4.6), but also among the youngest workers
(4.8 among workers aged under 25). However, part-time jobs are not chosen solely
for their reduced working hours: part-time workers declare themselves greatly
attracted by the work as well, and specifically by the opportunity to help other
people and share the organization’s mission (respectively 4.63 and 4.54). These
data demonstrate that part-timers are frequently influenced in their employment
choices by time constraints. Nevertheless, they also conscientiously choose their
job, and over time they tend to create a strong psychological contract and a
positive sharing of organizational goals.
Comparison between current and previous jobs shows that many workers
currently employed on part-time contracts admit that it has significantly
improved the organization and flexibility of working time (65.6% of cases,
which decreases to 52.5% for full-time workers), even at the expense of the final
wage (for 28.6% of part-time workers lower than in the previous job).
Furthermore, the shortening of working time and of the employment relationship
has worsened neither the level of relationships with colleagues and superiors nor
moral satisfaction.
Interestingly, when the interviewees were asked to judge their motivations and
attitudes towards work, their general perceptions did not vary between workers
employed part-time and full-time. They were similarly and mainly interested in
work as an opportunity for self-fulfilment, but they also thought that was a
necessity and a way to earn a living for themselves and for their families. Analysis
of the specific aspects of the job that attracted workers shows instead that part-time
workers had chosen their jobs mainly (and more than full-time workers) to meet
other personal interests and family needs (average score of 4.09), whilst job
security was less attractive (though on the contrary it was very important for full-
time workers, with average scores of respectively 2.57 and 3.34). Other aspects of
the job were evaluated similarly by full-time and part-time workers.
Some attitudes towards the work and the organization differ when the personal
and professional characteristics of part-time workers are considered. Females are
significantly more attracted than males by the consistency of the job with their
educational level and professional training, the opportunity to meet other familial
commitments, and by the stability of the job.
These preferences and differences in the needs of males and females, which
reflect different motivations for choosing the job and the organization, are also
typical of the personal family situation. When the data are separated for married
people and singles, it emerges that, in regard to some aspects of the job, differences
between the two genders increase. Specifically, interest in the sector of activity is
the most important aspect for singles (especially women, who assign it a score of
4.98); matching educational level and personal training mainly motivated married
people (especially men, with an average score of 3.48 in comparison with 2.62 of
singles); flexibility and meeting familial needs equally attract married men and
women (4.31 with respect to 3.66 of singles); involvement in the organization is
more interesting for singles than for married people, consistently with their need to
dedicate more time to their families than to their jobs. Finally, a lack of other job
opportunities partly explains the decision of several singles (and the youngest
respondents) to accept the job.
10.4 Partial Satisfaction?
What are the consequences of differences between part-time and full-time jobs on
workers’ satisfaction?
Assuming satisfaction with the job as a whole as the dependent variable, a first
multinomial model evaluated the impact of the personal and professional character-
istics of workers on their well-being. The differences found between full-time and
part-time workers (Table 10.2) are very significant. The job satisfaction of the former
significantly depends upon their civil status (since both married people and singles are
less satisfied than are divorced and widowed persons), their level of education (where
198 S. Depedri
Table 10.2 Job satisfaction and workers’ characteristics (ordered probit model)
Full-time Part-time
Std. coeff. t P(t)[|t| Sig. Std. coeff. t P(t)[|t| Sig.
(Constant) 1.2613 2.313 0.0207 0.4918 0.535 0.5928
Gender 0.0600 0.835 0.4039 -0.0794 -0.524 0.6002
Married 20.1759 21.946 0.0517 0.0541 0.262 0.7935
Single 20.1839 21.719 0.0855 0.0112 0.051 0.9597
Diploma 0.3015 3.752 0.0002 0.1021 0.688 0.4917
Degree 0.4490 3.760 0.0002 0.1508 0.838 0.4018
Specific training 0.2313 3.129 0.0018 0.0651 0.468 0.6395
Age 20.0092 22.282 0.0225 -0.0025 -0.394 0.6933
Tenure in 20.0077 1.814 0.0697 20.0162 2.108 0.0351
organization
Coordination 20.4919 23.182 0.0015 -0.3715 -1.201 0.2298
Supply of the service -0.0800 –1.177 0.2392 -0.1268 -1.054 0.2917
Open-ended contract 0.0691 0.915 0.3604 -0.1218 -0.918 0.3585
Collaboration -0.2527 –1.273 0.2030 -0.2401 -1.358 0.1746
Short-term training -0.0950 –1.488 0.1367 -0.0233 -0.199 0.8427
Overtime -0.0747 –1.113 0.2656 -0.1155 -0.784 0.4329
Log number of workers 20.0011 23.334 0.0009 20.0016 22.878 0.0040
Public–private nature 0.3248 5.107 0.0000 0.1244 0.79 0.4294
Hourly wage 0.0000 1.110 0.2668 0.0000 -0.222 0.8245
Model FT: Observations: 1,503; Iterations completed: 25; Log likelihood function: -2295.13;
Restricted log lik.-2338.1; Chi-squared: Degrees of freedom: 17; Sign. level: 0.000
Model PT: Observations: 402; Iterations completed: 24; Log likelihood function: -611.21;
Restricted log like. -622.84; Chi-squared: Degrees of freedom: 17; Sign. level: 0.000
people with degrees or diplomas are less satisfied), and their age (positively correlated
to job satisfaction). Furthermore, full-time workers are more satisfied when employed
in coordination roles. Job satisfaction instead decreases with tenure in the organiza-
tion, in large and in public organizations. On the other hand, the level of job satis-
faction declared by part-time workers is correlated only to their tenure in the
organization (where just-employed are more satisfied) and the size of the organization
(negatively correlated with job satisfaction).
An ordered probit model on workers’ motivations in the choice of the
organization and attitudes toward work yielded understanding of whether
part-timers are satisfied with their jobs only when they respond to their needs for
time to spend outside the job, or whether other motivations are sources of
satisfaction.
Comparison between full-time and part-time workers (Table 10.3) first shows
that the general satisfaction of the former depends upon more crucial aspects of the
job and of their motivations. Instead, the level of satisfaction of part-timers is only
related to few, although very important, variables. Specifically, both part-time and
full-time workers are more satisfied if they have been attracted to the organization
by the sector of activity and involvement in organizational decisions. Furthermore,
they see work mainly as a necessary experience for self-fulfilment.
Table 10.3 Job satisfaction and workers’ motivations and attitudes (ordered probit model)
Full-time Part-time
Std. t P(t)[|t| Std. t P(t)[|t|
coeff. Sig. coeff. Sig.
(Constant) -0.0641 -0.481 0.6308 -0.1895 -0.608 0.5429
Interest in the sector 0.0583 3.971 0.0001 0.1041 3.182 0.0015
Getting to know other workers 0.0150 0.984 0.3250 -0.0112 -0.371 0.7110
Getting to know users 20.0489 22.669 0.0076 -0.0510 –1.411 0.1581
Way in which the organization works 0.0621 4.387 0.0000 0.0561 1.630 0.1030
with users
Match with educational training 0.0155 1.177 0.2391 0.0267 1.004 0.3152
Compatibility with other commitments 0.0318 2.280 0.0226 0.0300 1.026 0.3048
Only job available -0.0194 -1.500 0.1335 -0.0132 -0.467 0.6406
Pay and career 0.0531 2.605 0.0092 0.0236 0.583 0.5599
Job stability -0.0207 -1.499 0.1340 -0.0127 -0.476 0.6344
Workforce involvement 0.0749 4.925 0.0000 0.0864 2.634 .0084
An opportunity for self–fulfilment 0.1244 7.437 0.0000 0.1098 2.972 0.0030
A necessity -0.0055 -0.304 0.7614 0.0705 1.627 0.1038
An opportunity for new relationships 0.0417 2.595 0.0095 0.0245 0.711 0.4768
A hobby 0.0114 0.59 0.5553 0.0300 0.779 0.4360
A contribution to society 0.0203 1.332 0.1828 0.0457 1.401 0.1611
To earn a living -0.0154 -0.804 0.4214 20.1068 22.662 0.0078
To earn as much as possible -0.0206 –1.263 0.2067 0.0177 0.437 0.6619
To support the family 0.0310 1.782 0.0747 0.0308 0.92 0.3574
A way to gain recognition -0.0204 -1.195 0.2322 20.0804 22.012 0.0442
Model FT: Observations: 1,514; Iterations completed: 28; Log likelihood function: -2,201,830;
Restricted log lik. -2,356,882; Chi-squared: Degrees of freedom: 19; Sign. level: 0.000
Model PT: Observations: 403; Iterations completed: 28; Log likelihood function: -5,757,962;
Surprisingly, no correlation emerges between job satisfaction and interest in

hourly flexibility. It is therefore possible to claim that part-time workers feel very
satisfied when they have intrinsic motivations in the sector of activity and find that
the job is a way to achieve professional growth and satisfy their life-needs
(Table 10.3). They differ from full-time workers principally because these latter
are more sensitive to all types of motivation, both intrinsic and extrinsic. In fact,
for this group of workers, job satisfaction increases when they are attracted to the
organization, on the one hand, by involvement, the opportunity to begin new
relationships, and the way in which the organization works with clients, but, on the
other, also by hourly flexibility (expressed by the item on compatibility with other
commitments), economic rewards, and career opportunities. Consequently, full-
time employees appear to be more complex and differentiated workers, whose
satisfaction must be achieved with multiple incentives. The satisfaction of part-
timers depends more upon their intrinsic motivation (Table 10.4).
The perception of fairness, as shown by the binomial analyses, is quite high and
homogeneous for part-time workers. This has consequences also on the correlation
200 S. Depedri
Table 10.4 Job satisfaction and workers’ satisfaction with different aspects of the job (ordered
probit model)
Full-time Part-time
(Constant) –1.3805 –11.918 0.0000 –1.5980 –5.748 0.0000
Professional development 0.1489 8.625 0.0000 0.2119 5.651 0.0000
Decision-making autonomy 0.0548 2.973 0.0030 0.0401 0.923 0.3560
Recognition of one’s own 0.0749 3.988 0.0001 0.2034 4.636 0.0000
contribution
Variety and creativity of the job 0.1204 6.658 0.0000 0.1607 4.347 0.0000
The working environment 0.0518 2.903 0.0037 0.0450 1.244 0.2134
The social usefulness of the job 0.0878 4.878 0.0000 0.0745 1.751 0.0800
The salary 0.0728 4.154 0.0000 0.0758 2.034 0.0420
Working hours 0.0738 4.070 0.0000 –0.0223 –0.574 0.5658
Previous career –0.0178 –0.781 0.4348 0.0076 0.155 0.8770
advancement
Future career advancement 0.0119 0.51 0.6100 –0.1193 –2.308 0.0210
Job stability 0.0343 2.074 0.0381 0.0074 0.234 0.8147
Relationships with 0.1152 6.533 0.0000 0.1326 2.773 0.0055
superiors
Relationships with 0.0393 1.899 0.0576 0.0254 0.605 0.5451
colleagues
Model FT: Observations: 1,514; Iterations completed: 23; Log likelihood function: –1,918,160;
Restricted log lik. –2,356,882; Chi-squared: Degrees of freedom: 13; Sign. level: 0.000
Restricted log lik. - 6,241,765; Chi-squared: Degrees of freedom: 13; Sign. level: 0.000
with job satisfaction (Table 10.5), since items of distributive fairness are not
significantly related to the general satisfaction of part-timers. The only factor that
influences part-timers’ satisfaction is the fairness of the wage considering the
economic resources of the organization. Part-time workers are thus more satisfied
when the principal is fair, and they tend to reciprocate or at least to inter-
nalize vertical fairness (i.e., the comparison between pay-offs of employer and
employees) in their utility function. There is a very different relationship between
job satisfaction and distributive fairness for full-timers. These workers are
significantly more satisfied with their jobs when they perceive the wage as very
fair considering mainly their training and effort, but also responsibility on the job
and their experience.
The proxy that influences the satisfaction of both full-time and part-time
workers is procedural fairness. All workers are similarly sensitive to communi-
cation, the attention of managers to workers’ ideas, and opportunities to improving
abilities.
Considering these results all together, part-time workers are again particularly
appreciative of opportunities for training and growth. The elements of fairness that
define their utility do not depend on economic aspects, but rather on being part of a
Table 10.5 Job satisfaction and workers’ perceptions of fairness (ordered probit model)
Full-time Part-time
(Constant) 0.5070 4.705 0.0000 –0.0743 –0.303 0.7620
Procedural fairness
Balance incentive/contribution 0.0162 0.866 0.3864 0.0118 0.347 0.7282
Communication 0.1051 5.953 0.0000 0.1013 2.488 0.0128
Professional growth and career –0.0279 –1.302 0.1928 –0.0348 –0.787 0.4315
Being listened to 0.0948 4.765 0.0000 0.1456 3.579 0.0003
Growth of skills and capabilities 0.1359 6.242 0.0000 0.1502 3.703 0.0002
Transparency of promotions –0.0520 –2.467 0.0136 –0.0544 –1.324 0.1855
Work better if more remunerated –0.0012 –0.084 0.9334 0.0399 1.329 0.1838
Not very good security 0.0114 0.773 0.4397 0.0392 1.201 0.2299
Cause of stress and tension –0.0693 –4.529 0.0000 –0.0347 –1.100 0.2711
Distributive fairness
Responsibility 0.0421 1.825 0.0679 0.0220 0.437 0.6618
Training 0.1201 4.723 0.0000 0.1098 1.618 0.1057
Experience –0.0534 –1.871 0.0613 0.0460 0.652 0.5141
Effort 0.0759 2.411 0.0159 –0.0138 –0.2 0.8417
Quality of the job –0.0506 –1.628 0.1036 0.0297 0.411 0.6813
Stress and tension –0.0087 –0.391 0.6961 –0.0142 –0.301 0.7636
Economic resources of the –0.0049 –0.282 0.7782 –0.0685 –1.904 0.0569
organization
Model FT: Observations: 1,508; Iterations completed: 25; Log likelihood function: –2,089,278;
Restricted log lik. –2,48,199; Chi-squared: Degrees of freedom: 16; Sign. level: 0.000
work environment which interrelates with them and considers them as an essential
part of the productive process.
10.5 Conclusions
Despite the increase in part-time employment, this contractual type is frequently

criticized by economists, who argue that part-time undermines workers’ oppor-
tunities to improve their abilities and skills, to pursue careers, and to be fully
satisfied. Analyses have generally concentrated on wage treatments and
differentials with respect to full-time workers. Nevertheless, investigations and
theory generally agree that part-timers are less secure in their jobs, receive lower
recognition both in the present and in the future (given the difficulty of career
advancement), and consequently achieve lower levels of well-being. This is
especially true when part-time is involuntary, i.e. it does not respond to workers’
needs for time to deal with other commitments, but is rather an organizational
imposition for financial and productive reasons.
202 S. Depedri
This chapter has investigated part-time workers in the social services sector,
concentrating on a sector characterized by a high proportion of part-time contracts,
a large presence of women, and the centrality of workers’ satisfaction in order to
improve their effort and the quality of services. In fact, the data should be inter-
preted in light of the fact that the workers’ involvement in an organization’s
mission and the development of good psychological contracts with employees are
central factors in organizational performance. And both of them, together with
personal well-being, may be significantly correlated to workers’ perceptions of
their jobs.
The results first show that part-time contracts are mainly stipulated with married
females on the one hand, and single, young, and highly educated people on the other.
Also the analysis of workers’ preferences and motivations has supported the idea that
part-time is explained by two different factors. Firstly, it is a response to the needs of
employees, who want jobs that match their familial needs and give them more time to
spend on other activities, such as voluntary work. Secondly, part-time contracts are
offered by organizations to just-employed people and are thus means to assess and
integrate workers into the organization. This feature also reflects the intention of
organizations to impose flexibility only on workers with less experience and to cover
their organizational needs and production peaks with workers that may be considered
more flexible because of their personal characteristics (age, civil status, work
experience, needs of training, etc.).
As a result, when the analysis focuses on average data on part-time workers, a
general sense of well-being emerges: part-timers are not less satisfied than full-
timers with the different aspects of their work, they receive internal training and
professional growth, transparent and complete information, and concrete oppor-
tunities for future careers (sustained by the presence of part-timers also in roles
of coordination and managerial activities). Furthermore, most elements of psy-
chological contracts—such as involvement and relationships—are satisfied, and
non-economic benefits (or intrinsic incentives) are provided. As a consequence,
part-time employees are just as satisfied as their full-time colleagues. Furthermore,
they have similar prospects of staying with the organization, but their loyalty
depends mainly upon their perceptions of distributive and procedural fairness.
However, two specific features should be considered. Firstly, part-time and full-
time workers should be treated in different ways because their job satisfaction is
correlated with different factors. In particular, dissatisfaction is mainly correlated
with no prospects of careers and future stability, while part-timers are more
satisfied when they perceive that they are being treated in a fair and non-
discriminating way, in general and primarily in regard to training and professional
growth. In this context, a good policy for organizations is to select workers with
high intrinsic motivations and altruism (i.e., ones who internalize others’ well-
being in their utility functions).
The data also show that part-time workers differ and can be classified according
to different needs, expectations, and behaviours. As already reported in the liter-
ature, involuntary part-timers represent a first group of workers. The analysis
developed in the paper has demonstrated that differences in levels of satisfaction
with work in general, and with the wage, job stability, and autonomy in particular,
are significantly lower among workers who are not motivated or satisfied with their
working hours, and who can therefore be considered involuntary part-timers.
In conclusion, the policies of part-time employment adopted by the organiza-
tions in the social services sector seem satisfactory and in line with the require-
ments of the activity, and they sustain a positive psychological contract. In fact,
firstly, part-time contracts respond to the flexibility needs of women and other
workers with family commitments. Secondly, hourly flexibility is a first approach
to the labour market and to the organization for both marginalized workers
(housewives or unemployed persons) and young people (mainly students). Thirdly,
the offer of part-time contracts as a mechanism to assess just-employed people
should be a good method for selecting and giving long-run job opportunities to
workers really motivated and committed to organizational goals. The only aspect
to which managers should pay closer attention is the possible dissatisfaction of
even motivated workers with their working hours. The clear communication and
transmission of workers’ preferences and organizational needs would be the best
ways to prevent under-effort and the desire to quit the organization.
The match between the demand for and supply of part-time jobs is thus
possible, and may be a source of quality performance rather than partial worker
involvement and satisfaction.
References
Barrett, G. F., & Doiron, D. J. (2001). Working part-time: By choice or by constraint. Canadian
Journal of Economics, 34(4), 1042–1065.
Booth, A., & Wood, M. (2008). Back-to-front down under? Part-time/Full-time wage differentials
in Australia. Industrial Relations, 47(1), 114–135.
Borzaga, C. (2000). Capitale umano e qualità del lavoro nei servizi sociali. Un’analisi comparata
tra modelli di gestione. Rome: Fondazione italiana per il volontariato.
Buddelmeyer, H., Mourre, G., & Ward, M. (2004). The determinants of part-time work in EU
countries: Empirical investigations with macro-panel data, IZA. Discussion paper, 1361.
Fullin, G. (2004). Vivere l’instabilità del lavoro. Bologna: Il Mulino.
Houseman, S. (2001). Why employers use flexible staffing arrangements: Evidence from an
establishment survey. Industrial and Labor Relations Review, 55(1), 149–169.
Rousseau, D. M. (1995). Psychological contracts in organizations. Thousand Oaks, CA: Sage.
Sen, A. K. (1993). Capability and well-being. In M. Nussbaum & A. K. Sen (Eds.), The quality of
life. Oxford: Clarendon Press.
Chapter 11
Workers’ Lifestyle Choices, Working
Time and Job Attributes
Giovanni Russo and Edwin van Hooft
11.1 Introduction
The Netherlands has been dubbed ‘‘the only part-time economy’’ (Freeman 1998).
This expression reflects the popularity of part-time jobs in the country, particularly
among working women. The beginning of the boom in Dutch part-time work can
be traced back to the tripartite agreement of 1982 (the Wassenaar agreement),
which dealt with issues concerning working-time reduction. Legislation that
converted the option to work part-time into what was essentially a workers’ right
was enacted during the 1990s (Euwals 2005; Euwals and Hogerbrugge 2006).
Since then, the incidence of part-time employment has been on the rise.
Indeed, whilst part-time employment is still rather uncommon among men, it has
become almost the norm for women. In 2004 around 62% of all jobs filled by
women had part-time schedules (the share had steadily increased from 56% in 1995
to 62% in 2003 and 2004); the incidence of part-time employment among working
women in 2005 fully 73% (including women working fewer than 12 h/week; it
The views expressed herein are the authors own and do not necessarily represent those of
Cedefop.
G. Russo (&)
CEDEFOP, PO Box 22427, 55102 Finikas (Thessaloniki), Greece
e-mail: giovanni.russo@cedefop.europa.eu
E. van Hooft (&)
Work and Organizational Psychology, University of Amsterdam, Roetersstraat 15,
1018 WB, Amsterdam, The Netherlands
e-mail: e.a.j.vanhooft@uva.nl
206 G. Russo and E. van Hooft
dropped to 68% among women working more than1 This difference is usually
ascribed to gender differences in labour-force participation—influenced by
favourable marginal tax rates for dual earner couples when the second earner works
only a few hours per week (Schettkat and Yocarini 2001)—and in human capital
accumulation that can be related to the role of women within households (Goldin
1997).2 In fact, women with young children represent the majority of part-time
workers (Riedmann et al. 2006).
Three possible schedules of part-time work can be found in the Dutch labour
market: a few hours every day, full-time work on fixed days of the week (or
month), and other fixed patterns.3 The third part-time schedule, which entails a few
hours of work on given days, is the modal offer among Dutch firms (Riedmann
et al. 2006).
Despite generally positive attitudes towards part-time work, part-time workers
are found to fare worse in the labour market than their full-time colleagues (Fuchs
Epstein et al. 1999).4 They appear to incur a (modest) part-time wage penalty—
they earn less than an otherwise equal full-time worker (Manning and Petrongolo
2008; Russo and Hassink 2008)—and the incidence of training and promotions is
lower among part-time workers than among full-time workers (Green and Ferber
2005a, b, c; Riedmann et al. 2006; Russo and Hassink 2008).
However, doubts about the desirability of part-time work arrangements are
countered by the finding that part-time workers are just as satisfied with their lives
and their jobs as their full-time counterparts. Therefore, low wages and slow career
1
There has been a steady increase in the proportion of employed women working part-time.
Among all women (including those working fewer than 12 h per week) the incidence of part-time
employment rose from 66% in 1996 to 73% in 2005, while the incidence of part-time among
women working more than 12 h per week rose from 58% in 1996 to 68% in 2005.
2
There is a gender aspect to the analysis that we will not pursue here. Nor will we deal with
estimation of the part-time wage gap. Likewise, we will not discuss whether workers accept part-
time jobs because full-time jobs are rationed. Aggregate evidence from the Dutch labour force
survey shows that in 2004 about 176 (146) thousand workers working fewer than 12 h (between
12 and 35 h) per week were trying to increase their working time and 418, 000 full-time workers
were trying to reduce their working time. This suggests that it is the supply of part-time jobs that
is likely to be rationed.
3
For example, the retail sector has peaks in demand during Thursday evening openings and at
the weekends (food retailers experience a demand peak on Sunday mornings).
4
Managers perceive the motivation of part-time workers as being no lower than that of their full-
time counterparts. However, about one quarter of managers tend to assess the career prospects of
part-time workers as worse than those of their full-time colleagues. The perception of diminished
career opportunities is stronger among workers than among managers (Riedmann et al. 2006).
11 Workers’ Lifestyle Choices, Working Time and Job Attributes 207
progression are understood to be in line with part-time workers’ preferences.5 It is

argued that, because non labour-market activities—which range from leisure to
important and non-leisure activities such as taking care of children, parents, and
people in need—may be very (intrinsically)6 rewarding activities, part-time
workers must be less interested than their full-time counterparts in a career, in
training, and in the monetary aspect of their jobs.7
Nonetheless, career issues may be especially important for part-time workers.
In fact, 60% (22%) of part-time jobs are offered by firms with more than 100
employees (firms with more than ten but fewer than 100 employees). About 82%
of all part-time jobs are in firms big enough to offer substantial career possibilities.
Overall, only 18% of part-time jobs can be found in small firms (with ten
employees or fewer) where the concept of a career may be less meaningful.
The purpose of the present study is to explore whether workers who prefer part-
time work differ from their full-time counterparts. It also investigates whether the
observed differences sustain a part-time wage gap, doing so by analysing data on
self-reported preferences for desired job attributes collected in the Netherlands in
2001 (Van Hooft et al. 2005).
5
This conclusion runs counter to standard economic reasoning: assuming standard (quadratic)
utility functions in income (consumption) and leisure, in that part-time workers derive higher
utility from leisure than do full-time workers, other things being equal, part-time workers should
receive a wage premium to reach the utility level of full-time workers. In other words, the
quadratic utility functions may suffer from misspecification. The presence of a part-time wage
gap and of equal utility levels among part-time and full-time workers can be reconciled by a more
complex utility function that lets workers derive utility from compliance with a role standard: an
identity. Membership of a group would be expressed in terms of compliance with a given norm
(working time) shared by all members of the group. The members of a group may derive
satisfaction by adhering to a norm consisting in an ideal number of hours worked by (and
consumption level of) the group members (Akerlof and Kranton 2000; Grodner and Kniesner
2006; Hakim 2000). Similarly, workers’ utility may be affected by comparison of their incomes
and wages with aspiration levels (Brown et al. 2008; Clark and Oswald 1996).
6
Moreover, roles may prompt people to undertake care activities in relation to life-course
contingencies; as these subside, individuals may revert to their preferred activities. Of course,
individuals may decide to purchase these services from the market.
7
Women’s attitudes toward labour-force participation are becoming more diversified over time.
That is, human resources officers encounter very different types of women: those who have fully
internalized feminine stereotypes (homemakers who would consider work less rewarding) and
women who are relatively androgynous in their preferences (who would regard work as very
important and rewarding). Research shows that women’s conditions have changed dramatically in
the US and UK. Women’s labour-force participation (and men’s attitudes towards it) has
improved, Equal opportunity practices have been introduced, the number of divorces has
increased, and the number of children born to single mothers has increased as well. Moreover,
gender roles have also evolved. Women in commercial jobs tend to show increasingly fewer
feminine stereotypes; by contrast, men tend to exhibit an increasing number of male stereotypes
(such as the breadwinner model). Hence, women tend to be more diverse than men in their work-
related attitudes. Some women retain the ‘homemaker’ stereotype while others have become more
similar to men, so that the spectrum of women’s preferences has widened (Konrad et al. 2000).
We find that part-time workers differ from their full-time counterparts in one
respect: they place more emphasis on working-time flexibility than do full-time
workers. However, if firms’ incentive schemes (career and training) make addi-
tional demands on workers’ time, time-constrained part-time workers will respond
to them less effectively than full-time workers. In so far as firms use this infor-
mation to allocate their training and promotion opportunities among their work-
force, part-time workers forgo career opportunities more often than their full-time
counterparts. Consequently, part-time employment spells will have long-term
effects on workers’ wages (Francesconi and Gosling 2005; Roman et al. 2004).
The paper is organized as follows: Section 11.2 presents the theoretical back-
ground, Sect. 11.3 describes the data, Sect. 11.4 illustrates the results, and
Sect. 11.5 concludes.
11.2 Identity, Short Hours, Flexibility, and Job Attributes
The term identity denotes a person’s self-image. Group identity is important

because it prescribes (behavioural) norms that affect (labour market) behaviour
(Ajzen 2001; Godin et al. 2005; Hagger and Chazisarantis 2005). Identity, among
other things, dictates the appropriate proportion of time to be allocated to labour
market and non-labour market activities (usually familial) and how people
belonging to a given group behave in certain circumstances (Akerlof and Kranton
2000, 2005). For example, identity prescribes appropriate labour-market behav-
iours around childbearing. Men (and women) may act differently according to the
extent to which their self-image is shaped by labour-market success. Career
women, whose self-images are centred on their jobs, may stop breastfeeding and
hire child-minders sooner than housewives who centre their self-images around the
family. In the same vein, men characterized by a work-oriented self-image may
continue to work in the days immediately following the birth of a child, whilst men
characterized by a more family-oriented self-image may take a period of leave (or
holiday) to assist their spouses. In fact, it is no coincidence that the majority of
women working on part-time schedules have young children, or are returning to
the labour market after a spell of non-participation because of childbearing and
childrearing (Hakim 2000; Riedmann et al. 2006).
Nowadays, however, society expects everybody to engage in labour-market
activities at least to some extent. Some individuals will therefore experience work
and non-work activities as in conflict with each other, while others will not. Some
individuals with greater demands on their time may feel under pressure, while
others may feel busy and productive. This different perception may depend on
whether these individuals like what they are doing, and on whether those close to
them (their ‘significant others’) think that they are doing the right thing (Thompson
and Bunderson 2001). It follows that individuals who adhere to identities that
stress the importance of non-labour market activities may perceive a conflict
between the behaviour prescribed by their identities and what society expects from
them. This particular kind of conflict may take the form of a time constraint (Fuchs
Epstein and Kalleberg 2004; Thompson and Bunderson 2001). To the extent that
the time constraint (work and non-work activities laying conflicting claims to
workers’ time) arises because of workers’ commitment to prescribed non-work
activities, it will not affect their utility.
Because of the presence of different identities, otherwise identical workers may
hold very different views about the importance of work in their lives. In particular,
because workers whose identities prescribe that they must engage in non-labour
market activities derive satisfaction from performing the non labor-market activities
prescribed, they may suffer when work instances intrude into their private sphere
(work-to-family conflict). Adherence to a certain group identity may thus require a
limit to be set on labour-market time, which may be achieved through the decision to
work on a reduced time schedule: that is, to work part-time.
Moreover, identity may influence individuals’ preferences in regard to job
attributes in two ways. Firstly, individuals whose identities prescribe that they must
engage in non-work activities (and who are committed to those activities) will
assign particularly high value to those job characteristics—such as the opportunity
to work at convenient times—that let them pursue their other interests. In addition,
it is likely that adherence to an identity that places minor emphasis on labour-
market success may entail little interest in career opportunities or in high wages.
Secondly, identity may indirectly influence workers’ preferences towards job
attributes: for instance, when workers anticipate certain reactions from supervisors
and colleagues and adjust their preferences accordingly.
Therefore, the preference that part-time workers allegedly display for reduced
career opportunities may in fact be spurious. We propose to use (subjective) data
about the locus of individuals’ interests (work or non-work activities) to infer their
identities, using this construct to infer how part-time workers evaluate job
attributes.
All in all, adherence to a given group identity may entail the decision to work
part-time. But this decision has far-reaching consequences, for the decision to
work part-time in its turn affects career and training opportunities, doing so in at
least three related ways (which we will not be able to disentangle in the present
article):
1. Part-time workers may believe that work has a limited importance for
achievement of their life-goals, and they may not invest enough in their jobs.
2. Firms that accommodate part-time workers’ preferences for flexibility do so in
order to please workers and to improve their morale (Riedmann et al. 2006).
When wage bargaining takes place, these firms may be in stronger bargaining
position and may be able to extract compensating differentials from part-time
workers in the form of low career and training opportunities and low wages
(Francesconi and Gosling 2005).
3. In a signalling setting, workers who prefer to work on a part-time basis (or
prefer to be able to decide when to work and for how long) do not respond well
to incentives schemes designed to induce workers to put in greater effort
through long(er) working hours (longer than contractually agreed upon). The
lukewarm response of part-time workers to incentives may induce firms to
withhold human capital investments from this segment of their workforce
(Booth et al. 2003; Cowling 2007; Fuchs Epstein and Kalleberg 2004; Landers
et al. 1996).8
In all these cases, part-time workers will experience a part-time wage gap that
will not be closed once they decide to return to a full-time schedule.
11.3 The Data
The data set used was a sample of 1,828 employed or job-searching individuals
(47% of them were women) which can be considered as representative of the
Dutch population. The data were collected with structured questionnaires
administered electronically. The questionnaire consisted of items about the cen-
trality of work, desired job attributes, and preference for part-time or full-time
employment. The data collected, however, did not contain any information about
job title, occupation, industry, and firm’s size.9
Here we describe the features of the data that are relevant to the analysis; the
interested reader can find a more detailed data description in Van Hooft et al.
(2005). About 77% of the respondents were employed at the moment of the data
collection: 62% had permanent contracts, 9% were in temporary jobs, and 6%
were self-employed. Of the employed workers, 61% were in full-time employment
(more than 34 h per week), 30% had long part-time jobs (fewer than 35 h but
working 12 h or more), and 9% had a small part-time jobs (fewer than 12 h per
week).10 Only 5% of the respondents in full-time employment would have
preferred a part-time job, while about 68% (62%) of those holding a long (small)
part-time job would have preferred a part-time job.
There was a striking gender difference: 81% of the individuals preferring part-
time employment were women. Only 12% of the men (either employed or not) had
a preference for part-time employment, while about 57% of the women would
have liked a part-time job (the length of the desired part-time job was not
8
Agency theory posits that, in the presence of moral hazard, firms may use incentives to induce
appropriate behaviour and to induce workers to supply the optimal amount of effort (Prendergast
1998, 1999; Salaniè 1997). Such incentives are typically wage contracts and promotion and
training opportunities (Gibbons and Waldman 1999; Malcomson 1999).
9
The data are not suited to investigating the relation between part-time workers’ labour-market
attitudes and the reasons inducing workers to opt for part-time work arrangements, or their
labour-market experiences (Green and Ferber 2005a, b, c; OECD 2003).
10
The classification of part-time jobs adopted appears to be rather accurate: 6.6% of all jobs
between 30 and 35 working hours per week are full-time jobs, while 2.7% of all jobs involving
more than 35 working hours per week are, in fact, part-time jobs (Dutch central bureau of
statistics, survey on employment and wages).
Table 11.1 Life goals (scale 1–5) by preferred number of hours and gender
Item Men Women
Full- Part- T-test Full- Part- T-test
time time score time time score
1 Having enough money 3.46 3.25** 2.05 3.32 3.29 0.45
2 Feeling that one is 3.86 4.01 -1.45 3.90 3.90 0.12
useful
3 Social contacts 3.83 4.03* -1.85 3.97 3.97 0.00
4 Respect 3.79 3.93 -1.40 3.89 3.87 0.34
5 Sense of security 3.75 3.79 -0.48 3.84 3.81 0.45
6 Having order and 3.31 3.36 -0.41 3.44 3.27** 2.59
regularity in life
7 Variation 3.70 3.81 -1.03 3.67 3.62 0.88
8 Having tasks that match 3.83 4.07** -2.28 3.73 3.80 -1.08
knowledge and
skills
9 Being able to grow and 3.84 3.97 -1.30 3.77 3.80 -0.43
develop
10 Status 2.51 2.37 1.19 2.37 2.21** 2.52
11 Work-life balance 3.81 4.07** -2.27 3.72 3.89** -2.56
12 Having responsibilities 3.57 3.55 0.16 3.42 3.41 0.29
13 Having enough leisure 3.91 4.33** -3.76 3.90 4.02** -1.95
time
Number of cases 1,828 888 73 554 313
specified). The preference for part-time employment was stronger among indi-
viduals without paid employment (57%) than it was among the respondents with
paid jobs (28%). However, 68% of the individuals preferring part-time jobs were,
in fact, employed.
There was also a gender difference in family roles: 62% of the respondents
reported themselves as household heads, the incidence of household heads being
86% (31%) among men (women). Similarly, 32% of the respondents were spouses,
with the incidence of spouses being as low (high) as 6% (61%) among men
(women).
Life-goals and preferences concerning work-related attributes differed between
part-time and full-time workers. Given the importance of gender, Table 11.1 com-
pares the importance attached to life goals by individuals preferring full-time and
part-time jobs, broken down by gender. The Table shows that men preferring full-
time jobs attach more importance to the availability of sufficient income, and less
importance to tasks matching their skills, leisure time, social contacts, and work/life
balance than do men preferring part-time employment. Conversely, women pre-
ferring full-time jobs attach more importance to an orderly life and to status, and less
importance to leisure time and work/life balance than do women wanting part-time
employment. Furthermore, women appear to place more importance than men on the
Table 11.2 The importance of having a job to attain life goals (scale 1–5) by preferred number
of hours and gender
Item Men Women
14 Having enough money 3.85 3.77 0.81 3.69 3.69 0.04
15 Feeling that one is 3.63 3.48 1.41 3.57 3.53 0.50
useful
16 Social contacts 3.53 3.40 1.15 3.52 3.52 0.06
17 Respect 3.60 3.53 0.65 3.60 3.61 -0.20
18 Sense of security 3.66 3.48 1.64 3.62 3.55 1.10
19 Having order and 3.44 3.52 -0.68 3.46 3.29** 2.56
regularity in life
20 Variation 3.34 3.30 0.30 3.42 3.38 0.52
21 Having tasks that match 3.69 3.73 -0.29 3.63 3.63 0.01
knowledge and
skills
22 Being able to grow and 3.62 3.68 -0.55 3.59 3.58 0.23
develop
23 Status 2.83 2.74 0.66 2.65 2.60 0.61
24 Work-life balance 2.95 2.71 1.82 3.05 2.96 1.33
25 Having responsibilities 3.49 3.58 -0.81 3.45 3.35 1.41
26 Having enough leisure 2.70 2.49 1.58 2.77 2.71 0.81
time
Number of cases 1,828 888 73 554 313
sense of security, whilst men appear to be more concerned than women with vari-
ation, the opportunity to grow and develop, status, and responsibility.
The second aspect considered was the extent to which having a job is perceived
to be instrumental in achieving specific life-goals. The average scores on these
items, again broken down by desire to work part-time and gender, are shown in
Table 11.2.
There is hardly any difference between workers who want to work part-time and
full-time as far as the perceived instrumentality of work in achieving life goals is
concerned. However, individuals who want to work full-time perceive work as
more instrumental to the achievement of a satisfactory income, status, order and
regularity in life, responsibilities, security, and a sense of usefulness compared to
individuals wanting to work part-time.
We now turn to evaluation of a series of job attributes. Table 11.3 presents the
average scores attached to various job attributes broken down by desired work
schedule (part-time versus full-time) and by gender.
Interestingly, job security, and career opportunities score significantly higher
among individuals who prefer to work full-time than among individuals who prefer
part-time work, regardless of their gender. On the other hand, the opportunity to
Table 11.3 Importance of job attributes (scale 1–5) by preferred number of hours and gender
Item Men Women
27 Pay level 4.05 3.78** 2.57 3.83 3.91 -1.33
28 Benefits 4.01 3.96 0.50 3.93 3.91 0.38
29 Career possibilities 3.78 3.49** 2.67 3.58 3.34** 3.88
30 Job security 3.88 3.58** 2.71 3.82 3.70** 2.07
31 Working conditions 4.04 4.10 -0.59 4.06 4.08 -0.27
32 Favourable working 3.66 4.12** -4.10 3.92 4.18** -4.47
time
33 Firm’s location 3.60 3.81* -1.73 3.81 3.91* -1.66
34 Holidays (and days off) 3.74 3.99** -2.27 3.85 4.00** -2.45
35 Possibility to work with 3.56 3.63 -0.60 3.77 3.68 1.55
colleagues
36 Firm’s reputation 3.64 3.53 0.97 3.71 3.59** 1.95
37 Training provision 3.57 3.40 1.56 3.58 3.44** 2.19
38 Stimulating and 4.03 4.12 -0.96 3.98 3.85** 2.44
challenging job
39 Selection process 3.21 3.27 -0.54 3.32 3.23 1.46
40 Demographic 2.90 2.84 0.51 3.01 3.00 0.15
composition of the
workforce
41 Childcare provision 2.24 2.15 0.64 2.64 2.85** -2.24
42 Equal opportunities (for 2.59 2.66 -0.53 2.94 2.84 1.45
minorities)
43 Opportunity to use own 4.03 4.16 -1.45 3.99 3.99 -0.12
skills and abilities
44 Good relationship with 3.86 4.10** -2.34 3.92 3.98 -1.21
colleagues and
managers
Number of cases 1,828 888 73 554 313
take days off, the firm’s location (i.e. commuting time), and the opportunity to work
favourable shifts are all items that score higher among workers who would like to
work part-time than among those who want to work full-time, irrespective of
gender.
Among men, those who prefer to work full-time assign more (less) importance
to pay (good relationship with colleagues and managers) than those who prefer to
work part-time. A supportive work environment (managers and colleagues) is
perceived as a necessary prerequisite by men who prefer to work part-time.
Women preferring part-time work deem the firm’s reputation, training provision
and the possibility of have interesting and stimulating work as less important job
characteristics than do women who prefer full-time jobs. On the other hand, women
who desire to work part-time place more emphasis than women who prefer to work
full-time on the availability of childcare services.
Table 11.4 General level of life satisfaction (Panel a) and job satisfaction (Panel b, for
employed individuals only) by preferred number of hours and gender
Panel (a) Men Women
Time time Score Time time score
No problem in making 3.81 3.78 0.24 3.77 3.60** 2.54
ends meet
Satisfied with one’s 3.95 3.77* 1.86 4.03 3.89** 2.78
life
Work attitude 3.59 3.40* 1.89 3.53 3.52 0.16
Item Work attitude
45 Work is an important 3.74 3.48** 2.37 3.57 3.60 -0.43
part of life
46 Work is a source of 3.62 3.36** 2.49 3.47 3.34** 1.97
satisfaction in
one’s life
47 Work gives a meaning 3.34 3.10** 2.05 3.26 3.10** 2.40
to one’s life
48 If I had enough 3.18 3.22 -0.28 3.33 3.33 0.00
money, I would
work
49 I enjoy talking about 3.37 3.25 1.14 3.37 3.44 -1.22
work with others
50 Work means more to 3.68 3.66 0.23 3.71 3.78 -1.10
me than just money
Number of 1,828 888 73 554 313
cases
Panel (b)
Job satisfaction 3.99 3.58** 2.83 4.00 3.76** 2.69
Intention to quit 2.09 2.89** -4.51 2.18 2.42** -2.17
Number of 1,390 750 53 375 212
cases
Overall, individuals (and women in particular) who prefer to work part-time

may be less sensitive than their colleagues preferring full-time work to the means
that firms generally use to provide incentives. This result matches the low
incidence of promotions among part-time workers, but it may not be in line with
part-time workers’ preferences. Cognitive dissonance theory suggests, in fact, that
the experience of reduced career and training opportunities and workplace frictions
(Blau and Ehrenberg 1997; Fuchs Epstein et al. 1999) may cause part-time to take
a different stance on these issues when they explain to themselves why they have
accepted such treatment (Akerlof and Kranton 2005).
We now analyse the differences among individuals’ attitudes towards work and
life satisfaction broken down by gender and preferred working-time schedule. The
results are presented in Table 11.4.
Panel (a) shows that individuals with a preference for part-time jobs are less
satisfied with their lives than are individuals preferring to work full-time. Women
preferring part-time work report a lower ability to make ends meet than women
preferring a full-time work schedule. Men preferring part-time work display a
lower score on the construct ‘work attitude’, which proxies intrinsic motivation
(Benabou and Tirole 2003; Deci and Ryan 2002), than men preferring to work full-
time.
Because the construct ‘work attitude’ was obtained by aggregating six items
(the average scores obtained on the six items), we now investigate differences
among the scores relative to these items by preferred work schedule and gender.
Consistently with the view that preferences for working-time schedules are
related to people’s identities, individuals who prefer to work part-time find that
work is a less important aspect of their lives, and regard it as less important in
giving meaning to their lives than do workers preferring full-time work. Moreover,
men who prefer a part-time work schedule find that work is a less important aspect
of life compared with men preferring to work full-time. This pattern of results has
also been found to characterize the difference between part-time and full-time
workers in the US (Thorsteinson 2003).
However, on the three items measuring intrinsic motivation (items 48–50),
workers who prefer part-time work score no differently from workers who prefer a
full-time work schedule. In other words, part-time and full-time workers tend to
show an equal level of interest in their work: personal interest in a given task is a
key motivational element, especially as far as intrinsic motivation is concerned
(Deci et al. 1999a). From this point of view, we suggest that voluntary part-time
and full-time workers may display a similar level of intrinsic motivation (as far as
work is concerned).
Furthermore, panel (b) shows that individuals preferring a part-time work
schedule are characterized by a lower level of job satisfaction and by a stronger
intention to quit than are their counterparts who prefer full-time work. In fact,
involuntary full-time workers may be keener to quit than voluntary full-time
workers because adjustments in their working hours may involve a job change
(Altonji and Paxson 1988, 1992; Manning and Petrongolo 2005).
Why might work be less central for individuals who prefer part-time employ-
ment than for those who prefer to work full-time? Table 11.5 suggests that the
answer may be forthcoming from the role of these individuals outside the labour
market.
Individuals who prefer to work part-time perceive a job as a source of rigidity
more than do people who prefer to work full-time. Furthermore, women preferring
part-time jobs tend to experience time-related problems, especially in relation to
caretaking activities. Men who prefer part-time work, on the other hand, emphasise
the loss of independence, having to obey orders, repetitiveness of tasks, and the
amount of pressure and stress, while women emphasise the scant increase in income
that part-time jobs provide.
In addition, individuals who prefer part-time work emphasise the firm’s loca-
tion (and commuting time). Moreover, the lack of childcare facilities is more often
Table 11.5 Importance of work related problems (scale 1–5) by preferred number of hours
and gender
Item Men Women
51 Too little time for care 2.61 2.68 -0.61 2.89 3.24** -4.62
52 Day too tightly 2.33 2.63** -2.30 2.55 2.75** -2.81
organized
53 Not enough increase in 2.61 2.44 1.10 2.52 2.69** -1.98
income (relative to
no job)
54 Too little time for 2.68 2.75 -0.54 2.97 3.04 -0.96
friends
55 Too little time for 2.54 2.68 -1.20 2.88 2.99 -1.60
household work
56 Loss of one’s 2.62 2.93** -2.22 2.73 2.79 -0.78
independence
57 Too repetitive 2.72 3.01** -2.21 2.58 2.59 -0.10
58 Having to spend time 2.55 2.60 -0.40 2.55 2.53 0.25
with people you
might not like
59 Too much pressure and 2.44 2.88** -3.59 2.61 2.70 -1.35
stress
60 Having to obey the 2.13 2.49** -3.10 2.04 2.06 -0.31
orders of others
61 Lack of Childcare 1.39 1.53 -1.41 1.63 2.08** -5.08
62 Transportation 1.54 1.81** -2.22 1.62 1.78** -2.17
(commuting)
63 Dutch language 1.08 1.05 0.56 1.06 1.04 0.80
64 Discrimination 1.29 1.22 0.74 1.22 1.25 -0.62
65 Having to do tasks 2.23 2.52** -1.97 2.00 2.03 -0.30
beneath one’s level
Number of cases 1,828 888 73 554 313
an obstacle to work for women who prefer part-time work, while men who prefer a
part-time work schedule report that having to do tasks beneath their job grade is an
obstacle to work.
Finally, we grouped the items to obtain three constructs (indexes) informative
of individuals’ identity. The three indexes are set out in Eq. 11.1
1
P
WI ¼ 115 ITi ITiþ15 A : fIT1 . . .IT10 ; IT12 g
i2A
P
TC ¼ 17 ITi B : fIT51 ; IT52 ; IT54 . . .IT56 ; IT24 ; IT26 g ð11:1Þ
i2B
P
WN ¼ 15 ITi C : fIT53 ; IT57 . . .IT60 g
i2C
Table 11.6 Work attitude and work importance, work resistance, and time constraint indexes
(scale 1–5) by preferred number of hours and gender
Men Women
Full-time Part-time T-test score Full-time Part-time T-test score
WI: work importance 2.62 2.60 0.21 2.59 2.52 1.11
WN: work resistance 2.43 2.72** -3.41 2.46 2.53 1.29
TC: time constraint 2.73 2.92** -2.52 2.88 3.02** -3.08
Number of cases 1,828 888 73 554 313
*significant at 10%; ** significant at 5%
Where WI is the work importance index, TC is the time constraint index, and
WN is the work resistance index, and IT denotes the item number (as appearing in
the first column of Tables 11.1, 11.2, 11.3, 11.4, 11.5). The three indexes relate to
identity in the following ways. WI captures the extent to which an individual’s
identity centres on the labour market: it is a weighted average of life-goals, where
the weights are the importance of having a job in order to attain particular life-
goals. TC captures the conflict between (possibly incompatible) roles (market and
non-market): it is obtained by averaging all the items that signal the presence of
competing claims on an individual’s time (work in conflict with other activities,
friends, leisure, family, or care activities, or generating work-to-family conflict).
WN captures resistance to work independently of the presence of alternative
activities to which individuals may be committed: it measures the strength of the
beliefs that individuals hold against having a job. The three indexes, broken down
by preferred work schedule and gender, are summarized in Table 11.6.
Individuals who prefer to work on a part-time schedule score higher on the time
constraint index than their counterparts who prefer a full-time schedule. Moreover,
men who prefer a part-time schedule score higher on the work resistance index
than men who prefer a full-time schedule.
The relationship between the preference to work part-time and preferences for
job attributes is important. However, these are aggregated data, and the relation-
ship found may be spurious. We therefore put our conjectures to the test of a
multivariate analysis.
11.4 Empirical Analysis
The empirical analysis focused on differences between individuals who preferred

to work part-time and their counterparts who preferred full-time work, controlling
for—insofar as this is actually possible—the effects of identity (i.e. the importance
of work and non-work activities).
We analysed workers’ evaluations of the importance of ten job attributes: pay,
benefits, career, job security, the possibility to work at favourable times, holidays,
training opportunities, opportunity to do interesting tasks, the availability of

childcare facilities, and the possibility to use skills.11 These items are interesting in
their own right. Moreover, because they are of such importance we could plausibly
assume that, over time, individuals have gathered considerable experience on these
matters, and that this would reduce the influence of measurement errors (Bertrand
and Mullainathan 2001). Because of the salience of gender in these matters we also
estimated the equations for men and women separately.
The results for the whole sample are presented in Table 11.7, while the results
obtained on the sub-sample of men (women) are set out in Tables 11.8 and 11.9.12
Because of the large amount of information presented we will discuss the
results of the three estimates jointly.13
Women find the opportunity to work at favourable times, the amount of holi-
days and days off, and the presence of childcare facilities to be more salient than
men, who, for their part, find pay and career opportunities to be more salient than
women do.
Predictably, individuals experiencing difficulties due to a lack of childcare
facilities positively evaluate opportunities to work at favourable times and the
presence of childcare facilities.
Individuals who display a preference for leisure also give importance to job
attributes that can be considered inputs to the leisure production function: money
(pay and benefits) and time (the opportunity to work at favourable times and the
amount of holidays and days off). The positive relationship between preference for
leisure and hourly wage, although surprising, is not new in the literature (Bertrand
and Mullainathan 2001).
The importance of work/family balance increases the salience of benefits
(especially for men) of the possibility of doing interesting and stimulating tasks,
and of deploying skills and abilities. Among women, the importance of work-
family balance increases the salience of the possibility to work at favourable times.
11
The nature of the variables, which measured the importance of job attributes based on a five-
item Likert scale, required the use of ordered probit regression models.
12
The explanatory variables included in all models requires further description. The number of
hours worked was actually an interaction term between being in employment (either permanent,
temporary or self-employed) and working hours (full-time, the reference group, part-time or
small part-time). Financial situation was the (self-reported) ability to make ends meet (based on a
five-point Likert scale). We preferred financial situation to income because of the latter’s lack of
accuracy (measurement errors). All regressions included: 11 regional dummies (the 12 Dutch
provinces), four tenure dummies (detailed in the summary statistics), two level-of-education
variables (primary and university), age and age squared, a dummy signalling the presence of
children (never significant, apart from a positive effect on the salience of the availability of
childcare facilities), a dummy marking the desire to live in an urban area (never significant), four
labour-market-position dummies (non-participating, unemployed, self employed, temporary
contract, and permanent contract, the reference group). The list of covariates also included
household composition: a breadwinner dummy, four role dummies (household head, spouse,
cohabiting partner, and child or other positions).
13
We report the coefficients relative to selected variables. The estimated models, however,
included all controls.
Table 11.7 Ordered probit models, the whole sample 1,828 cases, all controls included
11
Pay Benefits Career Job Favourable Holidays and Training Interesting Child Use own abilities
level security working time days off provision challenging tasks care and skills
Work attitude –0.10 –0.07 0.06 –0.04 –0.09 –0.17 0.14 0.19 0.12 0.25
(0.05)* (0.05) (0.05) (0.05) (0.05)* (0.05)** (0.05)** (0.06)** (0.05)** (0.05)**
Work importance 0.23 0.28 0.40 0.38 0.05 0.11 0.36 0.49 0.02 0.43
(0.05)** (0.05)** (0.05)** (0.05)** (0.05) (0.05)** (0.05)** (0.05)** (0.04) (0.05)**
Work resistance 0.04 0.01 –0.05 0.03 0.03 –0.01 0.00 0.04 –0.06 0.01
(0.05) (0.05) (0.05) (0.05) (0.05) (0.05) (0.05) (0.05) (0.05) (0.05)
Time constraint 0.04 0.06 0.09 0.04 0.20 0.29 0.07 0.05 0.07 0.05
(0.05) (0.05) (0.05) (0.05) (0.05)** (0.05)** (0.05) (0.05) (0.05) (0.06)
Work/home 0.03 0.06 0.04 0.03 0.08 0.01 0.07 0.08 0.00 0.13
balance (0.04) (0.04) (0.04) (0.04) (0.04)** (0.04) (0.04)* (0.04)** (0.04) (0.04)**
Leisure 0.12 0.15 –0.00 0.06 0.30 0.41 –0.04 0.04 –0.02 0.04
(0.04)** (0.04)** (0.04) (0.04) (0.04)** (0.04)** (0.04) (0.04) (0.04) (0.04)
Lack of child –0.01 0.00 –0.05 0.00 0.08 –0.01 –0.01 –0.04 0.48 –0.01
care (0.03) (0.03) (0.03) (0.03) (0.03)** (0.03) (0.03) (0.03) (0.03)** (0.03)
Working Hours
Part–time –0.11 –0.01 –0.01 0.10 0.26 0.05 0.01 0.11 0.08 0.06
(0.08) (0.08) (0.08) (0.08) (0.08)** (0.08) (0.08) (0.09) (0.08) (0.09)
Small part–time –0.15 –0.16 –0.15 0.07 0.25 –0.07 –0.09 –0.12 0.00 0.13
Workers’ Lifestyle Choices, Working Time and Job Attributes
(0.13) (0.12) (0.13) (0.12) (0.13)** (0.13) (0.13) (0.13) (0.13) (0.14)
(continued)
219
220
Want part–time 0.01 –0.08 –0.26 –0.24 0.20 0.13 –0.14 –0.11 –0.11 0.04
(0.07) (0.08) (0.07)** (0.07)** (0.08)** (0.08) (0.07)** (0.08) (0.07) (0.08)
Gender –0.13 –0.09 –0.25 0.08 0.23 0.18 0.02 –0.09 0.19 –0.05
(0.07)* (0.07) (0.07)** (0.07) (0.07)** (0.07)** (0.07) (0.07) (0.07)** (0.07)
Restricted –2124 –1975 –2345 –2260 –2300 –2237 –2310 –2010 –2756 –1917
Full model –2023 –1855 –2178 –2101 –2108 –2023 –2182 –1771 –2428 –1704
Chi-squared 200** 241** 334** 318** 383** 429** 255** 479** 655** 426**
G. Russo and E. van Hooft
11
Table 11.8 Ordered probit models, men 961 cases, all controls included
Work attitude –0.11 –0.12 0.03 –0.10 –0.17 –0.19 0.12 0.18 0.18 0.21
(0.07) (0.07)* (0.07) (0.07) (0.07)** (0.07)** (0.07)* (0.08)** (0.08)** (0.08)**
Work importance 0.25 0.30 0.39 0.36 0.08 0.09 0.30 0.49 0.01 0.46
(0.07)** (0.07)** (0.07)** (0.07)** (0.07) (0.07) (0.07)** (0.07)** (0.06) (0.08)**
Work resistance 0.09 0.02 –0.09 –0.03 0.02 –0.04 –0.00 0.11 –0.10 0.05
(0.06) (0.06) (0.06) (0.06) (0.07) (0.06) (0.06) (0.07) (0.06)* (0.07)
Time constraint 0.03 0.07 0.17 0.15 0.24 0.30 0.09 0.01 0.17 –0.01
(0.07) (0.07) (0.07)** (0.08)** (0.07)** (0.07)** (0.07) (0.07) (0.07)** (0.08)
Work/home 0.06 0.09* 0.06 0.04 0.03 0.03 0.07 0.08 0.01 0.17
balance (0.05) (0.05) (0.05) (0.05) (0.05) (0.05) (0.05) (0.05) (0.05) (0.06)**
Leisure 0.12 0.13 0.03 0.07 0.27 0.45 –0.02 0.06 –0.04 –0.00
(0.05)** (0.06)** (0.05) (0.05) (0.05)** (0.06)** (0.05) (0.06) (0.05) (0.06)
Lack of child –0.04 –0.02 –0.03 –0.04 0.08 0.02 –0.01 –0.06 0.45 –0.01
care (0.05) (0.05) (0.05) (0.05) (0.05) (0.05) (0.04) (0.05) (0.05)** (0.05)
Working hours
Part–time –0.30 –0.22 –0.17 –0.09 0.08 –0.12 0.08 0.06 –0.03 0.12
(0.14)** (0.14) (0.13) (0.13) (0.14) (0.14) (0.14) (0.15) (0.13) (0.16)
Small part–time –0.05 –0.20 –0.24 0.13 0.06 –0.17 –0.07 –0.23 –0.02 0.34
Workers’ Lifestyle Choices, Working Time and Job Attributes
(0.23) (0.20) (0.24) (0.21) (0.22) (0.23) (0.23) (0.25) (0.23) (0.24)
Want part–time –0.29 –0.01 –0.37 –0.33 0.42 0.19 –0.28 0.09 –0.15 0.09
(0.15)** (0.16) (0.15)** (0.14)** (0.15)** (0.15) (0.14)** (0.17) (0.16) (0.16)
Restricted –1101 –1043 –1190 –1213 –1264 –1209 –1212 –1031 –1363 –1007
Full model –1038 –973 –1100 –1131 –1175 –1084 –1152 –913 –1239 –894
Chi–squared 126** 141** 180** 166** 179** 251** 120** 236** 247** 226**
221
222
Table 11.9 Ordered probit models, women 867 cases, all controls included
Work attitude –0.07 0.01 0.10 0.03 0.01 –0.13 0.17 0.23 0.04 0.29
(0.08) (0.08) (0.08) (0.08) (0.09) (0.08) (0.08)** (0.09)** (0.08) (0.09)**
Work importance 0.17 0.26 0.44 0.45 0.01 0.15 0.45 0.50 0.03 0.40
(0.07)** (0.07)** (0.07)** (0.08)** (0.07) (0.07)** (0.07)** (0.07)** (0.06) (0.07)**
Work resistance –0.02 –0.00 –0.01 0.10 0.03 0.04 –0.01 –0.02 –0.03 –0.01
(0.07) (0.07) (0.07) (0.07) (0.07) (0.07) (0.07) (0.08) (0.07) (0.07)
Time constraint 0.10 0.08 –0.00 –0.09 0.15 0.29 0.03 0.10 –0.01 0.11
(0.08) (0.08) (0.08) (0.08) (0.08)* (0.08)** (0.08) (0.08) (0.08) (0.08)
Work/home 0.01 0.02 0.01 0.00 0.14 –0.01 0.06 0.07 –0.02 0.08
balance (0.05) (0.05) (0.05) (0.06) (0.05)** (0.05) (0.05) (0.06) (0.06) (0.06)
Leisure 0.14 0.16 –0.04 0.05 0.36 0.38 –0.09 0.04 0.02 0.07
(0.06)** (0.06)** (0.06) (0.06) (0.06)** (0.06)** (0.05)* (0.06) (0.05) (0.06)
Lack of child 0.00 0.02 –0.05 0.04 0.09 –0.03 –0.01 –0.03 0.52 –0.01
care (0.04) (0.04) (0.03) (0.03) (0.04)** (0.04) (0.04) (0.04) (0.04)** (0.04)
Working hours
Part–time 0.06 0.16 0.10 0.22 0.42 0.22 –0.08 0.10 0.14 –0.05
(0.12) (0.12) (0.12) (0.12) (0.13)** (0.13)* (0.12) (0.12) (0.12) (0.12)
Small part–time –0.09 –0.09 –0.01 0.08 0.41 0.06 –0.11 –0.11 0.04 –0.09
(0.16) (0.17) (0.16) (0.17) (0.17)** (0.18) (0.16) (0.16) (0.17) (0.18)
Want part–time 0.10 –0.11 –0.21 –0.21 0.11 0.11 –0.08 –0.19 –0.10 0.04
(0.08) (0.09) (0.08)** (0.09)** (0.09) (0.08) (0.09) (0.09)** (0.09) (0.09)
Restricted –1007 –926 –1126 –1038 –1003 –1020 –1097 –970 –1354 –907
Full model –956 –856 –1039 –928 –907 –920 –1008 –837 –1167 –798
Chi-squared 102** 141** 173** 219** 193** 200** 178** 267** 374** 218**
G. Russo and E. van Hooft
We now discuss the effects of the number of hours worked. Part-time workers
appear to find the opportunity to work at favourable times more important than do
full-time workers. This effect is especially strong among women, while men part-
time workers pay less attention than their full-time counterparts to pay issues.
Individuals who prefer to work part-time (regardless of whether or not they work
part-time) are found to pay more attention to the opportunity to work at favourable
times and less attention to job security, career and training opportunities than their
colleagues preferring full-time work. Moreover, for men preferring a part-time
work schedule pay is less salient than for men wanting to work full-time.
Consistently with our interpretation that the work attitude index can be a proxy
for ‘intrinsic motivation’ we find that, as it increases, the salience of pay (extrinsic
motivator) declines, and so does the salience of the possibility to work at favourable
times and of the number of holidays and days off. By contrast, a strong work attitude
increases the salience of job attributes such as the opportunity to: receive training,
to do interesting and challenging tasks, and to use one’s abilities.14
The work resistance index in no way affects evaluations of job attributes. By
contrast, the work importance index and the time constraint index appear to be
quite important.
High values of the work importance index, which typify identities that
emphasise the instrumentality of labour-market success to achievement of life-
goals, increase the evaluation of all job attributes except those related to the
availability of childcare facilities and the opportunity to work at favourable times
(for both men and women).
On the other hand, high scores on the time constraint index, which signal
adherence to identities that stress the instrumentality of success in non-work
activities to achievement of life-goals, heighten the importance of attributes (such
as the opportunity to work at favourable time and the amount of holidays and days
off) that enable pursuit of the non-work activities prescribed.
11.4.1 Discussion
We find that workers who prefer part-time jobs tend to place less importance on
career and training opportunities. However, we do not want to stress this point
excessively because of the effects of ‘cognitive dissonance’. If employers were to
offer part-time workers worse working conditions (i.e. no fringe benefits, no
training, low wages, no career opportunities etc.) than those of their full-time
colleagues, the former, in order to protect their self-esteem and to deal with
feelings of perceived unfairness, would reduce the importance attributed to such
items. This behaviour would be the result of ‘cognitive dissonance’. In other
words, people always seek to have consistency between their attitudes (what they
14
These items may influence an individual’s sense of control over his/her action (Benabou and
Tirole 2003; Deci et al. 1999a, b; Eisenberger et al. 1999).
deem important) and their situation (what they experience). When the situation
cannot be easily changed, people alter their attitudes or the psychological mean-
ings that they attach to things in order to cope with the situation.15 The issue is a
difficult one and we do not claim that we can solve it here. However, our inter-
pretation finds some support from the observation that, all in all, workers wanting
to work part-time appear to be time-constrained but otherwise intrinsically moti-
vated. In fact, their evaluations of the opportunity to work on interesting tasks, and
to deploy their knowledge and abilities, are no different from those of their full-
time counterparts.
Workers preferring part-time jobs appear to attach more importance than those
who prefer full-time jobs to the opportunity to work at favourable times (for them,
practical times) and to the amount of holidays and days off. This should not come
as a surprise, because part-time workers have other interests outside the labour
market and they need time to attend to them. Most importantly, part-time workers
appreciate the opportunity to use time flexibility in that they welcome the chance
to squeeze work between their non-work activities. This preference may have
long-run costs because managers report that they find it difficult to evaluate
workers on flexible-time work arrangements (IFF 2005). This difficulty extends to
the evaluation of part-time workers (a specific form of flexible time contract).
In addition, part-time workers may not stand out in managers’ evaluations, and
thus may not be short-listed for promotions, because of the time constraint to
which they are subject. This may be the case when output is difficult to measure
and managers must rely on workers’ (time) input to rank them. In the same vein,
part-time workers may appear to be uninterested in training when it conflicts with
their non-work activities.
In so far as career decisions are taken on the basis of managers’ evaluations—
which may be based on workers’ use of time—part-time workers may be expected
to have reduced career and training opportunities. When this is the case, workers in
part-time jobs will forgo training and career opportunities which they cannot
regain once they have decided to return to a full-time schedule. In this situation,
the decision to work part-time may have long-run effects, it would leave a scar.
11.5 Conclusions
In the Netherlands part-time work is a widespread phenomenon with a long his-

tory. Despite the popularity of this work arrangement, part-time workers tend to
receive lower pay and less career and training opportunities than do their full-time
15
This process takes place over time. Because women tend to remain in part-time employment
for longer spells of time than their male colleagues and because the time span spent in temporary
employment does not appreciably differ between sexes, ‘cognitive dissonance’ may help explain
why women are more satisfied than men in part-time employment, while they are just as equally
dissatisfied as men when in temporary employment (Petrongolo 2004).
counterparts. Because part-time workers are less likely than full-time workers to
progress in the labour market, the (negative) effect of forgone training and career
opportunities will also be felt once workers return to a full-time schedule.
In so far as part-time workers are time-constrained, and firms’ incentive
schemes make additional demands on workers’ time (working long hours to obtain
a promotion or additional pay, or attending training courses after the regular
working day), part-time workers may respond poorly to such schemes. The low
sensitivity of part-time workers to firms’ incentive schemes may thus induce
managers to withhold investment from this segment of the workforce. However,
part-time workers do not appear to be poorly motivated, in that they are concerned
to have interesting and stimulating jobs and want to put their knowledge and skills
to good use.
To the extent that the career gap of part-time workers is related to their ability
to receive a fair evaluation, the part-time career penalty should be lower in firms
with performance evaluation systems that rely on multiple indicators. Because
effective performance evaluation systems are a prerogative of large firms, the part-
time career penalty (or wage penalty) could decrease with firm’s size; and it could
increase with the proportion of small firms in the economy, so that the part-time
career (or wage) gap could be large in countries, like Italy, characterized by a large
proportion of small firms.
Finally, part-time workers view the opportunity to work at (for them) favourable
times as a highly important job amenity because it enables them to combine work
and non-work activities. Hence, firms’ attempts to regulate part-time time slots (to
accommodate firms’ needs) will reduce workers’ satisfaction (and possibly their
productivity). In other words, the advantages accruing to firms (in terms of flexi-
bility) from the ability to change part-time work shifts according to their needs may
be annulled by the decrease in productivity that would likely characterize dissat-
isfied part-time workers who can no longer work in their preferred time slots.
Appendix: Variables
Wants part-time Dummy variable, 1: individual would like to work part-time

Labor market position
Permanent Dummy variable, 1: individual has a permanent job
Temporary Dummy variable, 1: individual has a temporary job
Self employed Dummy variable, 1: individual is self employed
Unemployed Dummy variable, 1: individual is unemployed
Out of the labor Dummy variable, 1: individual is out of the labour force
force
(students…)
(continued)
(continued)
Working hours
Full-time Dummy variable, 1: individual works more than 35 h per week
Part-time Dummy variable, 1: individual works between 12 and 35 h per week
Small part-time Dummy variable, 1: individual works fewer than 12 h per week
Jobless Dummy variable, 1: individual works 0 h per week
Education
High Dummy variable, 1: individual holds an university degree or comparable
Medium Dummy variable, 1: individual holds a secondary school diploma (general
or vocational)
Low Dummy variable, 1: individual holds a primary school diploma (general or
vocational)
Gender Dummy variable, 1: woman
Age Individual’s age (in years)
Tenure
Shorter than 1 year Dummy variable, 1: tenure in present job shorter than 1 month
1–2 years Dummy variable, 1: tenure in present job between 1 and 2 years
Longer than Dummy variable, 1: tenure in present job longer than 10 years
10 years
Unemployed l.t. Dummy variable, 1: if life-long total unemployment spell longer than
1 year
Households characteristics
Head Dummy variable, 1: individual is head of the household
Spouse Dummy variable, 1: individual is spouse of the head of the household
Partner Dummy variable, 1: individual is (non-married) spouse of the head of the
household
Child Dummy variable, 1: individual is the child of the head of the household
Partner in the Dummy variable, 1: partner present in the household
household
Breadwinner Dummy variable, 1: individual is the breadwinner in the household
Children Dummy variable, 1: children are present in the household
Urban type Individual reports him/herself to be an urban type, much or very much
Table A1 Descriptive statistics

Mean Standard deviation
Wants part-time 0.21 0.41
Labor market position
Permanent 0.62 0.49
Temporary 0.09 0.28
Self-employed 0.06 0.23
Unemployed 0.05 0.22
Out of the labour force 0.19 0.39
Working hours
Full-time 0.23 0.42
Part-time 0.47 0.50
(continued)
Mean Standard deviation
Small part-time 0.23 0.42
Jobless 0.07 0.25
Education
High education 0.36 0.48
Medium education 0.45 0.50
Low education 0.20 0.40
Women 0.47 0.50
Age 40.12 12.36
Tenure
Less than 1 year 0.14 0.35
1–2 years 0.10 0.30
2–5 years 0.16 0.37
5–10 years 0.10 0.30
More than 10 years 0.26 0.44
Unemployed l.t. 0.15 0.36
Household characteristics
Household head 0.60 0.49
Spouse 0.32 0.06
Partner 0.00 0.47
Child 0.08 0.27
Partner in the household 0.81 0.39
Breadwinner 0.59 0.49
Children in the household 0.42 0.49
Urban type 0.42 0.49
Financial situation 3.76 0.95
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Part IV
Non-Standard Employment, Quality of
Work and Firms’ Outcomes
Chapter 12
Non-Standard Employment and Quality
of Work: Towards New Forms
of Measurement
12.1 Introduction
In the wake of an intense season of research in the 1960 and 1970s, of which
perhaps the key European point of reference was the Tavistock Institute of London
(Baldamus 1961), in the following two decades, the studies by historians, soci-
ologists and economists into the conditions and the quality of work underwent a
substantial setback. Only at the end of the 1990s did we witness renewed interest
in the theme, of which an emblematic example may be found in the surveys
promoted by the Oecd and the Eurofound (European Foundation for the
Improvement of Living and Working Conditions) of Dublin. This renewed interest
on the part of the social sciences in the theme of work and the conditions in which
it is supplied was due to a number of different factors. Among these, a role was
certainly played by the tertiarisation of the main economies, the technological
change and that of the organisational and production models, the change of welfare
regime and the rise of flexible/precarious work, the changes in the representation
mechanisms and the changing role of the trade union in the most advanced
economies. These factors, interconnected in various ways and, at least in part,
retraceable to the transformation/integration of the world economies, have led to a
radical change in work and its traditional functions in terms of defining individual
and collective identities, with evident consequences on the processes of labour
market structuring, posing new questions to social and work policies on a national
T. Addabbo (&) G. Solinas (&)

Department of Economics, University of Modena and Reggio Emilia,
Viale Berengario 51, 41121 Modena, Italy
G. Solinas
e-mail: giovanni.solinas@unimore.it
and international level. In this situation, the study on the conditions and quality of
work has taken on new importance.
In the present chapter, we shall start out from the taxonomy proposed in a
groundbreaking study by Gallino (1993). In defining work and connoting it in
terms of qualitative characteristics, Gallino identifies four key dimensions, which
the author presents as follows:
‘‘The mass of data available makes it possible for us to state that the concept of the quality
of work would not be adequate to the functions of interpretation, critical analysis and
planning […] if it did not cover at least four different dimensions: a. the ergonomic
dimension, which corresponds to the psycho-physical needs of the worker; b. the com-
plexity dimension, which corresponds to the needs of commitment in terms of overcoming
difficulties, of creativity, of professional training, and of the accumulation of work
experience; c. the autonomy dimension, which corresponds to the need to self-determine
the rules to follow to carry out the activities allocated to an individual (or group) in order
to achieve given production goals; d. The control dimension, which corresponds to the
need to control not only the ongoing conditions of the work process (like in c.), but also
the general working conditions, such as the object of production, its application, the
organisation and the activities to assign to oneself and to others.’’ Gallino concludes:
‘‘High quality work is thus that which in each of these dimensions presents properties able
to satisfy the relative needs to a high degree’’ (Gallino 1993, p. 393).1
Re-examined 30 years on from its formulation, despite maintaining an

extraordinary heuristic/explanatory power, Gallino’s taxonomy has at least two
clear limitations. The first is its not considering adequately the relational/social
dimension of work; in other words, that which may be defined as the recognition of
a status within the community that the worker belongs to. The second, highlighted
by a great number of gender studies, concerns the possibility, given the organi-
sational model, of making compatible or ‘‘reconciling’’ living and working
conditions.
On the basis of these considerations, we have proposed an interpretational
model which—drawing on Gallino’s taxonomy, introduces two new dimensions:
the social dimension, meant as a need for social recognition, and the work-life
balance dimension, aimed at satisfying the need for compatibility between
working conditions and the management of everyday life.
Gallino’s model, modified as suggested above, was thus broken down into more
than 40 single items measurable quantitatively according to a suitable scale, and
complete with a vast range of control variables which may be traced back to the
various dimensions of the quality of work. The model was subjected to an initial
verification in various research projects: it was proposed using a sample of some of
the most representative companies to be found in the province of Modena; it was
replicated on a sample of engineering firms in one of the most advanced industrial
sectors (the packaging companies present within the province); it was also pro-
posed in the sector of care for the elderly (including social cooperatives, public rest
1
This and the other citations from works originally in Italian have been translated by the
Authors. Usual disclaimers apply.
12 Non-Standard Employment and Quality of Work 235
home structures and private homecare assistants). Over the course of three years,
these studies provided the most quantitatively significant database on the issue of
the quality of work of all those available on a national level. Although it does not
constitute a statistically representative sample, it provides individual evaluations
on the quality of work as perceived by a total of around 2,500 workers.
The results make it possible to highlight significant differences within single
groups and, on a common and homogeneous basis of comparison, between the
different groups, and which outline the characteristics of workers, as well as
prevalent organisational models, contractual conditions, the technology of pro-
ductive processes and, more in general, the conditions of the request for work. The
results obtained, in other words, constitute a promising basis on which to reason on
the patterns of segmentation/structuring of the labour markets emerging in an
advanced economy in rapid transformation.
The interpretational scheme proposed by Addabbo et al. (2007) exploits fuzzy
logic to provide the formulation of a fuzzy expert system, and will be applied in
this chapter to the interpretation of the quality of work in non-standard
employment.
The research path chosen is not immune to criticism: many studies by work
psychologists underline how there exists a systematic distortion between the
subjective perception of the quality of work and the objective conditions in which
work is performed. Also Sen convincingly argues that work which is ‘‘poor’’ in
terms of capabilities will tend to be evaluated positively by the subjects that
perform such work. The more the worker is ‘‘fragile’’, the lower his/her expec-
tations of work are and the better his/her evaluation will be of the various
dimensions that characterise his/her work.
In Sect. 12.2, we shall examine the state of the art with regard to the definition of
work and of the quality of work. In Sect. 12.3 the various dimensions of the quality of
work are presented, including those used to define the quality of work following the
taxonomy proposed by Gallino, and the empirical evidence is also presented. In Sect.
12.4 we shall examine the interpretational scheme followed in this chapter through
the presentation of an expert fuzzy system. The expert system is thus applied to the
measurement of the quality of work with special reference to non-standard
employment (Sect. 12.5). A number of brief notes then follow in the conclusion.
12.2 The State of the Art and the Empirical Evidence
12.2.1 The Central Role of Work in Western Thought
Work, working conditions and the quality of work have long been (and will
presumably continue to be so in the foreseeable future) a fundamental element of
Western thought. The most immediate way to understand this is perhaps to make
reference not to the corpus of the social sciences, in which—albeit on radically
differing suppositions—in one way or another work lies at the heart of the process
of creating value, and neither to the political and social movements which have
built the foundations of their collective identity on work, but rather on the thought
of the great Western religions.
It is well known that in the Protestant ethic, ‘‘work is meant as Beruf, i.e. as the
task for which a person feels that he is particularly suited on the basis of his
innermost qualities and by which he will be subjected to divine justice’’ (Lazzarini
2009, p. 94). In this sense, the valorisation of work comes across as a response to a
divine calling.
Also in the Catholic tradition, work plays a key role. In the social doctrine
of the Church, for all intents and purposes the vision of work as a malediction
has been overcome, and the expressive rather than the instrumental dimension
of work prevails. Through work, man transforms nature and realises himself as
a man and, ‘‘in a certain sense, becomes more of a man’’ (John-Paul II,
Laborem Excercens, 1981). In the Compendium it is said that ‘‘Beyond being a
decisive paradigm in social life, work has all the dignity of a field in which
both the natural and supernatural vocation of the person must be realised’’
(Compendium of the Social Doctrine of the Catholic Church 2004, No. 101,
p. 56). A notion of work emerges as a space of relationships, of the
shared construction of the common good, and as a fundamental area of an
individual’s life.
Today there are a lot more people working than there have ever been in the
entire history of humanity. And the underlying questions on work, as Manghi
observes, are substantially the same as they were a century ago (‘‘what space
does work take up in life in quantitative terms, how much emotional intensity
surrounds it […], how and how much does it contribute to defining social
status, or to producing identity, […], conflicts and sense of belonging’’, Manghi
2009, p. 99).
And yet there is no doubt that a great number of onlookers and scholars—from
at least partially differing perspectives—have supported the loss of the centrality of
work in defining individual and collective identities (from Touraine, among the
first and most original, to the Italians Accornero and De Masi, to the somewhat
controversial contribution of Rifkin himself).
Processes of stasis and decline in studies on work have arisen in various dis-
ciplines, from sociology to the anthropology of history, to the historiography of
work (Causarano et al. 2008; Musso 2002; Van der Linden 1993).
In the field of the social sciences, perhaps the most emblematic path is that of
the progressive separation of industrial sociology and the theory of organisations,
and the substantial merging of the latter into the neoclassical paradigm of business
theory. The following section is dedicated to providing a brief outline of this path
and to highlighting its limitations.
12.2.2 The Evolution of the Theory of Organisations

and the Disappearance of Work
In the first half of the last century—from the works of Taylor (1911) up to those of
Blau (1955)—the study of work (as the primary object of industrial sociology) and
the forms of labour organisation were effectively one and the same thing (in
particular, Chinoy 1955; Dalton 1950; Gouldner 1954; Walker and Guest 1952;
and the above-cited Blau 1955).
With the exception of the studies based on the socio-technical paradigm, which
revolved largely around the Tavistock Institute in London (in particular, Trist and
Bamforth 1951; Rice 1963; Mumford 1967; Herbst 1974) as well as the studies
drawing on the participatory models in Germany and the Scandinavian countries
throughout the 1960 and 1970s, the analysis of organisational forms slowly
became detached from the analysis of work. As Barley and Kunda (2001) note, the
concept of reference for organisational theories focused on the general organisa-
tional principle which allows for and promotes forms of collaboration within a
group (Miller and Rice 1967). These processes had far-reaching consequences:
they changed disciplinary parameters; organisationalists and work scholars foun-
ded new journals of reference as so on. The idea emerged according to which the
actions of man even within production processes are not isolatable from the
resulting organisational/institutional forms. The analysis of work became a specific
(complementary) branch of sociology, and the scholars of bureaucratic forms (and
thus of organisations) clearly started to move towards the schools of business and
economic analysis tout court. Perhaps the clearest symbolic act is the configuration
that the sections of reference were provided in the USA by the American Socio-
logical Associations from the 1970s onwards.
This process has not been a painless one from a cognitive point of view: in the
studies of organisational forms, working conditions are largely overlooked in the
analyses, and replaced with ever more stereotypical canons. The figure of the man
at work is no longer. There is merely his petrified image (to cite the term coined by
Barley and Kunda) of which the greatest testimony is perhaps constituted by the
flood of essays on Fordism and post-Fordism a few years later. The ideal-type of
the worker on the production line (and, conversely, of all that which differs from
it), inspired thousands of pages of somewhat blurred and approximate analyses of
working conditions and processes. Stereotypes on working conditions and quality
were adopted yet which were generally inadequate to describe the transformation
processes taking place. Of all these, the difficulty in classifying professions (which
involves all the main statistics offices in industrialised countries) provides a clear
example.
Following a completely different path, the company theory independently
evolved towards a theory of organisational practices. This path is outlined in great
detail in the articles by Milgrom and Roberts (1992) and Roberts (2004). Company
theory, breaking away from the study approaches which emerged in the 1930s, is
basically configured as a theory of organisational practices. As Anna Grandori
(an organisationalist in disciplinary terms) observes in the introduction to the

Italian edition of Roberts’ volume, organisational practices ‘‘include mechanisms
of production management, of human resource management, of planning and
control, as well as the division and coordination of work, considered in their real
applicative form in the company: flexible versus rigid machinery; specialisation or
polyvalent skills; vertical or horizontal communication; the intensity of teamwork,
of hierarchical interventions, of monetary incentives, of outsourcing, etc.’’
And nevertheless, from this perspective, work no longer exists. The conditions
in which work is performed, just like the various analyses of working processes
and production processes in the theory of industrial organisation, basically con-
stitute the ‘black box’, not giving any account of the conditions in which work
takes place, nor of the evaluation that workers themselves give of it: both remain
external with regard to the object of the analysis.
In other words, there are two main underlying points (and limitations) of
convergence between the organisational theory and modern company theory. The
first was reproposed recently in Italy by Butera (2009), re-examining the point of
view of the socio-technical school (Touraine, Perrow, Gouldner). ‘‘It is not pos-
sible to understand social relationships unless the technological resources and
production process on which social processes are built are studied.’’ He continues,
‘‘Certain aspects of the social relationships of the necessary cooperation between
working people cannot be understood unless the product creation stages are
studied […]: what goes in and what comes out of a factory, how prime materials
are transformed, what kind of machinery is used, how long it takes, where the
production line may be interrupted etc.’’ (Butera 2009, pp. 21–22; see also La Rosa
1993). Obviously, the same reasoning may also be applied to services.
The second element, common to both organisational theory and contemporary
company theory, is that the incentive schemes (and contracts) are entirely based on
individual motivation, yet nothing is said of the weight of the subjective perception
of work, which is the underlying basis of the motivation. That which Barnard
highlighted as far back as the early twentieth century (1938) is completely over-
looked: behaviour depends on latent structures of which the basis is inevitably
made up of elements of sharing/estrangement, thus providing a positive/negative
perception of one’s own working conditions.
12.2.3 Work and the Quality of Work in a Changing World:

The Great Transformations
For the above-mentioned reasons, reintegrating the studies of organisational forms

and of working conditions should be one of the high-priority issues on the social
sciences research agenda. Bringing back the attention to the characteristics of
work, just as took place to a certain extent with product analysis, is a key issue.
And even more so in a changing world.
12.2.3.1 The Rise of Flexible Labour, Changes in the Welfare

Regime and Trade Unions
The first great transformation was the rise of flexible labour. Flexible labour
coupled with a generally unfavourable demand for work, an inadequate and
contradictory right to work, a training system falling apart, a fragile welfare
system, and lastly, the behaviour of companies attempting to minimise the almost
fixed costs of labour (according to the canonical articulation through which, in his
day, Oi defined them) over a short time span, make workers precarious, with
permanent consequences on their working careers and the income expected by a
great number of newcomers to the job market (Berton et al. 2009). And not only in
Italy.
In several activities (training, research) and in several professions (journalists,
professional consultants, translators, etc.) a stable contract is not necessary in order
to guarantee good conditions of work and pay (Paci 2005; Saraceno 2005; Sem-
enza 2000). However, in many other areas it is, and here most observers underline
risks of social marginalisation and exclusion. Gallino (2001) observes that frag-
mented and uncertain work risks producing fragile life stories and identities, to the
point of mining workers’ self-esteem.
Sarchielli (2008) suggests that in this sphere, the changes in work ‘‘are so
radical as to risk compromising the very social status of work itself, that which—
according to Jahoda’s well-known distinction (1982)—may be defined as explicit
positive functions (first and foremost that of guaranteed income), and latent
positive functions (identity, relations, social integration, etc.). Beck (2008) speaks
of ‘‘endangered life stories’’; Sennet (1999) of the ‘‘corrosion of character’’. Albeit
with a different background, discipline and language, the conclusions that Boeri
(2009) reaches are not all that different. Conversely, an analytical element shared
by many is that ‘‘an efficient organisational framework’’ calls for ‘‘not so much the
flexibilisation of the working relationship, but rather its stabilisation’’
(Leoni 2008).
There is one further element which completes and renders this framework even
more articulate: the changes in collective action and workers’ representation. For
economists, this has traditionally constituted unchartered territory. In a well-
known passage, Ezio Tarantelli observed that: ‘‘economists’ approach to trade
unions has often been akin to that of mediaeval monks when faced with a Greek
word found in a manuscript. Unable to read it, they would note it down and carry
on regardless: graecum est, legi non potest’’ (Tarantelli 1986, p. 23). The history of
efficient negotiation models provides no grounds on which to modify Tarantelli’s
judgement.
And yet, if we look at the labour market from the supply side, then as now, the
role of worker representation and the trade unions is fundamental. In fact what has
changed the supply conditions is the growing difficulties in providing trade union
protection. As Baglioni observes, ‘‘in order to explain the difficulties of trade union
protection, the prevailing thesis—well-founded yet not exhaustive—identifies the
main cause in the rise of globalised markets, starting from the labour market’’. In
general terms, this is the thesis that Reich (2008) popularised. Yet it is clearly
over-simplistic. ‘‘Other factors (not always separate from globalisation) also
obstruct the presence and efficacy of trade union action. These factors have to do
with the aging of the population and the increasing costs of welfare spending; the
growing spread and importance of an imposed minimum wage; […] the difficulties
of representing the vast range of professional, occupational and contractual pro-
files; the increased role of trade unions (be it real or presumed) as a ‘corporative’
and conservative player […]; the tendency to look upon workers as just another
item on the list of company stakeholders’’ (Baglioni 2009, p. 152).
This range of factors, in Italy in particular, has not led to a fall in the level of
trade union membership (on the contrary, those enrolled in the main three trade
union confederations in Italy over the last 20 years has grown by around 32%), but
to a radical change in its make-up, with a sharp decline of around one million
members in the private sector and, in particular, in manufacturing, against a rise
among public sector workers and immigrants (especially in the services sector)
and, above all, among pensioners. The underlying datum is that the growing share
of young people with fixed-term contracts in thus structured trade union organi-
sations, unsurprisingly, is not given suitable expression and representation
(Tronti 2009).
12.2.3.2 Changes in Technology, Production Models

and Organisational Models
The second aspect that must be borne in mind is that of technical and organisa-
tional change. The bonds between the changes in technology, the forms of work
organisation and the requirements demanded of the worker are somewhat complex,
and to this day have been given no theoretical framework. Several scholars argue
that the introduction of digital technologies increases the complexity of productive
processes and requires a higher level of skills (Johnston and Packer 1987). Others
have pointed out changes in the opposite direction (Aronowitz and De Fazio
1994). Yet others have highlighted contrasting tendencies in terms of the quali-
fication of work (Diprete 1988; Spenner 1995; Zuboff 1988). And there are also
those who claim that the change brought about by technology per se has far less
radical effects on the qualification of work than one might think (Gallie 1994).
Once again, whether and to what extent technological change influences the
requirements demanded of the worker depends on the way in which the technology
has been designed, implemented and used in a specific organisational context
(Barley and Kunda 2001).
While the link between technology and the contents of work/professional skills
required is controversial, nobody, however, doubts that the advent of micro-
electronics, of electronics applied to processes, of robotics and information tech-
nologies in general have radically changed (and are still doing so) organisational
and production models. Furthermore, the change of techniques and the crisis of
Taylorism/Fordism (which has been growing with increasing speed since the end
of the 1970s) have led to a proliferation of industrial models (Kern and Schumann
1991). Boyer and Freyssenet (2005) state that in the car industry alone, today at
least six completely different production/organisational models (in terms of
product policy, the organisation of production, wage management, tasks required
of workers and general working conditions) coexist. The very emergence, over a
relatively brief time span, of a flood of notions such as ‘‘virtual organisations’’
(Byrne), ‘‘shamrock organisations’’ (Handy), ‘‘network organisations’’ (Powell),
‘‘boundaryless organizations’’ (Arthur and Rousseau), lean structures (Woomack
et al.) and many others is proof of it.
There is perhaps also another phenomenon, which may be noted particularly
with regard to services. For many working figures, on the intermediate or exec-
utive level, traditional professional profiles are blurred and we are faced with a
complete redefinition of their roles. Alongside numerical flexibility, a functional
flexibility emerges (and not always with positive connotations) with great force.
The following example is typical of this trend: ‘‘Once in all banks, […], there were
the desk clerk and the cashier with two distinct professional profiles; then came the
desk clerk-cashier, and then the desk clerk–cashier–consultant, leading to the desk
clerk–cashier–consultant–promoter and so on, merging, subtracting and rede-
signing the role on the basis of the various banks’ varying commercial and
management policies.’’ (Ceri 2009, p. 147). In these fields, the task base in
broadened, but not enriched. This is a far cry from that process of labour evolution
that the theorists of job enlargement/job enrichment had hoped for (Davis and
Taylor 1972).
The underlying point is that on the production line, in a chemical or metal-
working factory or a press shop, in automated workstations, in the engine room of
a ship, in the control centre of a power plant, in banks, in hospitals, in rest homes,
in the care of children and the elderly, whatever the reference parameters adopted
are, work has changed radically. Suffice to look through the recent volume edited
by Riccardo Leoni (2008) to understand how much this process is widespread and
pervasive, also in Italy (see also Brugnoli 2008 and Leoni and Albertini 2009).
For all of the reasons that have been outlined in brief in the previous pages,
each of which are interconnected to a greater or lesser extent, today once again
‘‘there is an air […] of widespread anxiety with regard to the quality of work, its
professional content, its stability, the adequacy of its remuneration, without for-
getting the human climate in which it takes place’’ (Manghi 2009, p. 107). It is also
for this reason that the redefinition of work in people’s existence and in society is
once more one of the key topics examined by economics and the social sciences. It
is in the very era of large-scale transformation, shown once more by seminal works
of Weber, Durkheim and Marx, that work and the quality of work return to the
spotlight.
Among the many possible developments deriving from the considerations
examined, the one that we have chosen to privilege here has to do with the
conditions and the quality of work according to the subjective perception of the
worker. The way in which work returns to centre stage is the way in which it is
judged by those who carry out that work.
12.3 The Quality of Work: Definitions and Empirical Evidence
As we attempted to show in the previous section, in work—meant as the manu-

facturing of goods and the provision of services, in industrialised nations—over a
quarter of a century everything has changed. The technology has changed, with the
more or less widespread introduction of electronics and information technologies,
and of information in process management and control. The organisation has
changed, designed to guarantee quality and conformity based on pre-defined
product standards, the customisation of goods and services, speed of delivery, in a
system in which a potential competitor is no longer (only) one in the same geo-
graphical area, but could be anywhere in the world. These two transformations—in
technology and organisation—in turn have radically modified the abilities and
skills required by companies: even when there is large-scale customisation of
goods, growing (although not exclusive) responsibility for this is placed on the
control mechanisms of machinery and not the skills and versatility of ancient
crafts, in other terms recreating the functional conditions of work traditionally
associated with mass production.
These transformations are no less radical if we look not at the company but the
workers: the definition of professional roles has become more and more blurred;
the bond with the company and the workplace has weakened; career expectations
have become far more uncertain, and the identity mechanisms associated with
work have also been altered. Lastly, the mechanism of collective action and
representation has been transformed. As said before, everything has changed.
The study presented in these pages looks at the transformation of work from a
specific point of view: albeit in a circumscribed environment—and with a meth-
odology part of which has yet to be decided on—we shall attempt to provide a
measurement of the subjective perceptions of workers of the quality of the work
they do. In particular, the research focuses on the theme of the quality of work, in
its various dimensions, and investigates the connections that exist between
workers’ perceptions and the quality of work (and hence their degree of satis-
faction), comparing them to the contractual and remunerative characteristics of
their employment agreements, with particular reference to non-standard employ-
ment (Sect. 12.5).
In the first part of this section, while starting out from the taxonomy put forward
by Gallino, we shall define the various dimensions of the quality of work before
analysing the empirical evidence gathered.
12.3.1 The Dimensions of the Quality of Work
The notion of the quality of work, as has been widely recognised by scholars from
a diverse range of disciplines, draws on a number of different dimensions, each of
which is measured by a different group of indicators/reference variables. From the
socio-economic point of view (Gallino 1993; La Rosa 1983; Merllié and Paoli
2001; Sestito 2002) there is a broadly shared abandonment of the income
dimension as the element which might best sum up and define a good job.
‘‘The concept of quality of work,’’ notes Gallino (1993, p. 393), ‘‘summarises
the entire field of variation of the work phenomenon—of all the types and forms in
which it may manifest itself.’’ High-quality work is a job able to satisfy the needs
of the worker. From this point of view, by modifying the scheme originally pro-
posed by Gallino, the six following dimensions are taken into consideration:
1. The social dimension;
2. The economic dimension;
3. The work-life balance dimension;
4. The complexity dimension;
5. The organisational dimension, of autonomy and control;
6. The ergonomic dimension.
12.3.1.1 The Social Dimension of Work
The first dimension taken into consideration is the social one. There are four
aspects for which a form of measurement is provided: 1. relationships within
the workplace (with co-workers and superiors), attributing great significance to
the possibility for workers to take part in the decisions concerning their own
working context; 2. the social recognition of work (based on the social rec-
ognition of merit, of specific professional skills, and of the consideration—in
terms of status—received by members of a given community); 3. the individual
satisfaction of the worker, also expressed in relationship to the perception of
being able to grow in professional terms and to gain promotion; and lastly, 4.
the relationship between work and social life (including the possibility of
managing one’s time on a weekly and daily basis, and also with reference
to holidays).
The social dimension, insofar as it is inherently relational, also sums up aspects
connected to the economic and organisational dimensions, as well as that of the
work-life balance, which are explored more thoroughly below.
12.3.1.2 The Economic Dimension of Work
In the economic dimension, most attention was focused on the aspects connected
with the present and future perception of workers’ income and their welfare
coverage as a whole. In particular, on examining the economic dimension of work,
attention was paid most of all to four main aspects: 1. the level and variability of
retribution (overall retribution, possibility of making use of remuneration in kind,
performance-linked bonuses, seniority-based bonuses); 2. the perception of job
security and social safety nets; 3. family rights (perception of maternity rights and
the possibility of making use of holidays and leave in order to maintain family
relationships); 4. expected income (an approximate evaluation of future work
training and perceived career opportunities).
12.3.1.3 The Work-Life Balance
The work-life balance dimension specifically concerns those environments (and

those means) that the company uses to make working time compatible with the
other interests of the worker, first and foremost the worker’s relationship with his/
her own family nucleus. Once more, the notion is that a job is of good quality if it
is able to respond to the need for the job to co-exist with ‘‘other’’ aspects. In this
perspective, all of the aspects that may be implemented throughout one’s working
career, the year and in the everyday management of work times are examined.
12.3.1.4 The Complexity of Work Dimension
For a range of objectives, typical of the various company functions, the complexity
of work reflects the ability of the worker to respond to the needs of the company,
as expressed in the tasks assigned to him/her. In this perspective, a job is of good
quality if it is able to develop such abilities over time. In rendering this notion
operational, essentially two fields were taken into examination: 1. the difficulty/
variety of the job, the repetitivity of the tasks and the overall commitment
required, and 2. the skills required (measured in terms of the work preparation
necessary and the need for professional training).
12.3.1.5 The Organisational Dimension, of Autonomy and Control
The organisational and control dimension concerns the worker’s potential for
being informed of, affecting and interacting with the decision-making process of a
given organisation. In the analysis of this dimension, prevalently three aspects
were focused on: 1. the degree of autonomy with regard to the ways in which the
work is organised; 2. the internal relationships with co-workers, direct superiors
and top management; 3. participation in the decision-making process with regard
to one’s own specific working context.
12.3.1.6 The Ergonomic Dimension of Work
The ergonomics of work may be functional in terms of satisfying three of the

worker’s needs: a safe working environment which does not put the worker’s
physical health in danger; an organisation of the process which does not entail a
waste of physical resources, and lastly, a working environment which maintains

the psychological wellbeing of the worker.
Gallino’s analytical scheme, later re-elaborated in Italy by La Rosa (1983), is
substantially modified here by the writers, introducing two new dimensions: the
social dimension and that of the work-life balance.
The reasons behind this extension are easily understandable, and concern both
the change in the role of work in contemporary societies as it is perceived by the
main social actors, and at the same time, the way in which observers and social
scientists take into account or, in some cases, anticipate the way in which society
(and in particular, western society) look upon work.
The social dimension concerns the network of relationships (within the single
workplace and with the outside world) that a specific network of relationships is
able to activate. The work-life dimension concerns the conditions of compatibility,
and therefore the use of time as split between work and other activities. Both
dimensions, in different ways, take account of the growing weight of that which is
‘‘non-work’’ in the definition of individual identity, or self-perception, of the
worker.
The second innovation proposed in this study is that of trying (albeit as an
initial approximation) to activate and supply a measurement of the initial
analytical scheme. Each of the dimensions, in fact, is measured by a range of
variables, precisely defined for each dimension, and measured exclusively in
relationship to the subjective perception expressed by the worker (Sect. 12.4).
12.3.2 The Quality of Work in Empirical Research

both in Italy and Europe
With the aim of monitoring one of the objectives of the European Strategy of
Lisbon—that of creating ‘‘more and better jobs’’—indicators were proposed based
on criteria partially different from those discussed in the previous pages. Both the
European Commission and the International Labour Office (Ilo) identified various
dimensions with regard to the quality of work, and proposed a system of indicators
by which to measure them.
Leschke et al. (2008) put together an indicator known as the Job Quality
Indicator (JQI) which could be broken down into six sub-indicators aimed at
measuring salaries, skills, training and career prospects, working conditions and
job security, participation and representation, contractual conditions, work time
and the work-life balance. The index is obtained by carrying out a weighted
average of the results obtained in the various dimensions, and using different
sources of data including not only the European Foundation for the Improvement
of Living and Working Conditions (Eurofound) surveys, but also the European
Union Statistics on Income and Living Conditions (EU SILC) and the European
Countries Labour Force Surveys.
The dimensions on which the measurement proposed in European Communities

(European Communities 2008) focused also referred to the system of indicators
defined by the European Council of Laeken, and are to do with wages and socio-
economic security, working conditions and intensity, skills and training, and the
work-life balance. European Communities (2008) makes use of an analysis of
the main components as well as a cluster analysis, also showing the accuracy of the
measurements obtained through the various methodologies, and leading to the
grouping of the European countries analysed on the basis of the results obtained in
the various dimensions analysed.
Other proposals may be found in the studies of Clark (2009), Tangian (2007)
and Seifert and Tangian (2009) and in the works presented at the fourth interna-
tional seminar on the measurement of the quality of work (Unece 2007).
Using the International Social Survey Programme between 1989 and 1997, and
the British Household Panel 1991–1999 (with regard to the answers on the
questions on job values), Clark (2005) shows that if we focus only on the monetary
dimensions or on working time, we risk underestimating the deterioration of other
elements with regard to the quality of work in Oecd countries which came into
play over the 1990s. On the basis of Clark’s analysis (2005, p. 386) Italy in
particular shows a low level of job satisfaction (along with the UK and Hungary).
A similar result by comparing the studies of the European Foundation may be seen
in Isfol (2004).
We may note a reduction in the level of satisfaction in work itself, while at the
same time there is greater satisfaction with regard to wages and job security. Clark
also shows that there was a rise in inequality as concerns job outcomes (the young
and the most highly educated obtained the best results in terms of job quality, and
the members of trade unions in terms of job security).
Considering job satisfaction on the basis of the various characteristics of the job
itself, when comparing genders, with various data sources for the UK, Rose (2005)
shows that several different trends were present, with a fall in terms of job sat-
isfaction among women and a stable or rising trend among men. On the basis of
the analysis carried out by Green (2004) and by Green and Tsitsianis (2005) using
survey samples (1992, 1997 and 2001), the decline of job satisfaction in the UK
appears to be associated with the intensification of energies concentrated on work,
and the lower degree of discretion granted to workers in the everyday performance
of their tasks.
The European Foundation for the Improvement of Living and Working Con-
ditions in Dublin carries out a survey every five years into working conditions. The
survey makes use of a random and statistically significant sample of the population
in various European countries. There are currently five surveys available (from
1991 to 2010). On the basis of the analysis of the European Working Conditions
Surveys, Burchell et al. (2007) identify the permanence of gender inequalities in
many aspects of working conditions in European countries.
The use of information on job satisfaction with regard to various items shows a
higher average level of job satisfaction among women (Clark 1997; Sousa-Poza
and Sousa-Poza 2000) albeit in decline (Sousa-Poza and Sousa-Poza 2003) and
with differences between countries (Sousa-Poza and Sousa-Poza 2000; Kaiser

2005). The link between intensification and the various dimensions of work
analysed by gender was examined by Burchell and Fagan (2004) using the
European Foundation’s European Working Conditions Survey. Burchell and
Fagan (2004) show the existence of a negative effect on the work-life balance
linked to the presence of long and unsociable hours. However, this difference is
lower among the younger and the most highly educated, those in professional and
managerial positions, and among the female workers whose mothers were pro-
fessionals or who had more male-dominated positions (Clark 1997). The difference
does not seem referable to the sample-selection (Clark 1997; Sousa-Poza and
Sousa-Poza 2007), but rather linked to the lower expectations of women (Clark
1997). According to Kaiser’s analysis (2005) of European Community Household
Panel (ECHP) data, the differences in levels of job satisfaction are connected to the
differences that may be observed with regard to job opportunities and the degree of
job market modernisation. In fact, there appears to be a positive correlation
between the degree of restriction in access to the job market among women and the
emergence of the ‘gender-satisfaction paradox’ (meaning a greater level of satis-
faction for women, despite their working conditions being worse on average). The
literature has also highlighted differences in the degree of job satisfaction with
regard to a range of job items, and the importance of different elements that
contribute to the quality of work together with the heterogeneity of gender with
regard to age, type of work and level of education (Clark 1997; Sloane and
Williams 2000; Sousa-Poza and Sousa-Poza 2007; Bender et al. 2005), and these
results lead us to bear gender differences in mind more than other individual
characteristics when analysing the type of work and the different elements of
working conditions.
The difference in job satisfaction by gender in more female-dominated roles is
found to be connected to the greater level of flexibility that these jobs are able to
provide leading to a better life-work balance (given the role that women often have
in terms of housework and caring duties): a dimension to which women attribute a
greater value (Bender et al. 2005).
A link lesser than that generally expected in the literature was found between
the demand for a reduction in working hours, the work-life balance and the
presence of children in the family, according to the British Social Attitudes Survey
cited by MacInnes (2005). However, this result is attributable to the already rel-
atively low number of hours worked by women in the UK and the spread of part-
time work among those with children.
Not only is a reduction in terms of job satisfaction to be found when there is a
gap between actual working hours and expectations depending on the intrinsic
value attributed to work, but also an effect on living conditions, considering the
levels of stress to which married women with children are subjected to in Japan
(Boyles and Shibata 2009). On the basis of this evidence, it is suitable not only to
consider working hours but also the difference that exists between actual working
hours and the desired number of hours as a decisive element in the level of job
satisfaction and that of living conditions.
According to the ISFOL (2004), on the basis of the analysis of micro-data

gathered as part of a European survey on the quality of work with reference to
Italy, the different weight of domestic workloads and caring leads to the greatest
dissatisfaction among women on average with regard to working time and
rhythms.
With reference to atypical work models, the ISFOL (2004) shows that in Italy,
given the same conditions, there is a lesser degree of job satisfaction among
atypical workers towards the stability of their employment compared to other
forms of contract. There also appear to be a range of different reasons behind the
level of satisfaction with regard to working conditions on the basis of forms of
contract. Among temporary workers, those who have a higher education qualifi-
cation appear to be less satisfied with regard to their employment stability.
12.4 Measuring the Quality of Work Using Fuzzy Logic
In the literature, the main analyses adopted to measure the quality of work are
multivariate econometric and descriptive statistical analyses. In this chapter,
however, we apply fuzzy logic2 to the measurement of the quality of work. The
interpretational scheme proposed in Sect. 12.3.1 has been broken down into more
than 40 single items, measurable quantitatively using a suitable scale, and backed
up by a range of control variables, retraceable to the various dimensions of the
quality of work.3 The model was subjected to an initial check in various research
projects: it was proposed to a sample of representative companies in the province
of Modena; it was repeated using a sample of light-engineering firms in one of the
most advanced industrial sectors (the packaging companies present in the
province); it was also proposed in the sector of care for the elderly (including
social cooperatives, public rest homes and private homecare assistants). Over the
course of three years, these studies provided the most quantitatively significant
database on the issue of the quality of work of all those available on a national
level. Although it does not constitute a statistically representative sample, it
provides individual evaluations on the quality of work as perceived by a total of
around 2,500 workers.
With regard to the measurement of the quality of work, we believe that the
‘‘measure’’ of intangible quantities in a multidimensional context implies, on one
hand, the use of quantitative instruments to convert the variables into an appro-
priate numerical scale, and on the other hand, the definition of suitable aggregation
operators to synthesise the initial qualitative data into indexes which also envelop
2
For a description of the underlying characteristics of a fuzzy model, see Altrock (1995), Piegat
(1999), Zadeh (1965), Facchinetti (2002), Facchinetti et al. (2002) and Facchinetti and
Pacchiarotti (2006).
3
A more detailed description of the fuzzy expert system is to be found in Addabbo et al. (2007).
the information provided by the data. The classical methodologies of the theory of
multi-criteria decisions offer a wide range of mathematical–statistical tools
designed to provide aggregate evaluations. Most of them are formulated via real
value functions, linear in terms of single attributes. Suffice to think of averages or
weighted averages. The limitations of linearity in the above-mentioned method-
ologies have been overcome in various ways by more recent techniques, arising
from the field of artificial intelligence.
Of all these techniques, which are commonly known as ‘‘soft computing’’, we
have applied a fuzzy expert system. There are a great number of advantages to this
system: from the mathematical point of view, the aggregating function is extre-
mely nonlinear in terms of its variables, which then serve as the micro-indicators
that will supply the aggregate evaluation of the quality of work. From the point of
view of significance, the fact of being constructed not ‘‘starting from the data’’, but
from the experience of those who create it provides a clear and perfectly intelli-
gible picture of what the experts think: it is all transparent, criticisable, justifiable
and modifiable. From an understanding point of view, its strength lies in the
possibility to create aggregations with qualitative (and not quantitative) rules of
the same micro-indicators, tools that may also be used by people who are not
entirely at ease with refined mathematical tools. The methodology exposed allows
for better interaction between experts from different sectors, providing a result
allowing for a clearer interpretation of the choices made and the results obtained.
In brief, the use of fuzzy logic makes it possible to obtain synthetic indicators of
the quality of work without losing the complexity of its definition, and coming to
the check of hypotheses regarding the existence of compensating differentials and/
or of job market segmentation. Thus one might ask in which working positions (in
terms of qualifications and type of contract) and in which contexts (which sectors,
company types, territorial areas) jobs of different quality may cluster together, and
which individual and family characteristics place the worker at greatest risk of
finding him/herself in jobs defined overall as being of low quality. In this field, one
may even set out to check what relations exist between changes in company
organisation structures and various other elements of the quality of work. In the
application proposed in Sect. 12.5, the fuzzy system is used to compare the quality
of work in its various dimensions, with special reference to the various forms of
contract.
Within the analytical framework described in the above sections, in the analysis
of the quality of work six different dimensions are identified, as cited schemati-
cally in Table 12.1, and which, obviously, are an integral part of the survey tool
used and constructed with the aim of exploiting them in the measurement of the
various dimensions.4
4
The questionnaire was devised together with Vando Borghi as part of the Mario Del Monte
Foundation and University of Modena and Reggio Emilia project on the quality of work.
Table 12.1 The dimensions of the quality of work
250
Dimensions Needs Type of items examined Intermediate dimensions

Social dimension – Needs of recognition within the working community – Vertical social relationships – Internal relationships
and that of reference (superiors, supervisors, bosses) – Recognition of work
– Horizontal social relationships (co- – Relationship between
workers) work and social life
– Recognition of status within the – Overall satisfaction
community
Economic dimension – Needs of financial subsistence – Career and remuneration – Career
– Remuneration
– Welfare regime – Job security, social protection – Protection
Work-life balance dimension – Needs of reconciling life and work time – Parenthood rights – Reconciliation of life and
– Family-friendly policies work time
– Working hours
Complexity dimension – Needs of communication relative to the human – Content, difficulty and variety of – Variety
working environment (in general terms) work – Training required
– Commitment required
– Needs of commitment, development and training – Complexity of tasks etc
– Training and Experience
Organisational, autonomy and – Needs of discretion – Conditions of responsibility – Autonomy
control dimension – Needs of control over production and participation in – Possibility to propose changes – Control
the production choices – Participation in decision-making
process
(continued)
T. Addabbo and G. Solinas
12
Dimensions Needs Type of items examined Intermediate dimensions

Ergonomic dimension – Needs relative to the time spent at work and other – Cognitive fatigue and stress – Physical fatigue
connected aspects – Flexibility of working hours – Mental fatigue
– Psychophysical needs relative to the (physical) – Environmental health hazards – Environmental health
working environment; safety needs hazards
– Quality of technological
instruments
– Layout and organisation of
workspaces
– Safety in the workplace
Source Partial elaboration of Gallino 1993 and La Rosa 1983, p. 96
Non-Standard Employment and Quality of Work
251
Each indicator gives rise to aggregations, produced with fuzzy expert systems
of micro-indicators (single items), re-aggregatable in turn in further synthetic
indexes.
The reader will have noted in the above table (and even more clearly in the
description of the characteristics of work) that a set of items may be found in more
than one dimension. This is not a typing mistake or, even worse, a badly thought
out taxonomy. In fact, one of the characteristics of the fuzzy expert systems is that
of being able to examine items—even with different weighting—which by their
very nature are of a multidimensional value.
12.5 The Quality of Work in Non-Standard Employment
The fuzzy expert system was applied to the micro-data gathered in the province of
Modena, from 719 workers in a company sample ranging from the light-engi-
neering sector to building, services, food, IT and clothing. The companies were not
chosen at random and are of different sizes, sectors and structures. Despite the fact
that through an analysis of the single case studies it is possible to reconstruct the
specific determining factors of the quality of work compared to the companies
analysed,5 in this section there is no intention of proceeding with the analysis of
case studies, but rather we shall use the measurement of the various dimensions of
the quality of work in order to put forward an initial reading of the differences that
may be found between different jobs with different forms of contract, considering
the observations gathered as a whole.
By using the fuzzy methodology, one obtains the measurement of the overall
indicator of the quality of work in the various dimensions of which it is made up,
thus being able to detect interactions between the various dimensions which make
up the quality of work. Thus, considering the values assumed by the various
dimensions, the results are proposed of the analysis of the correlation between the
various observable dimensions. A positive correlation emerges between the output
of the economic dimension and that of the complexity and the social/organisa-
tional dimension, while there is a weaker correlation with the ergonomic dimen-
sion (Table 12.2).
Furthermore, the analysis of the various dimensions showed lower values for
the overall index of the quality of work and for the economic dimension with
reference to women and manual workers employed in manufacturing, where
growing values may be found when coupled with the rising level of qualification.
For women doing voluntary part-time work, a significant improvement may be
noted in the work-life balance dimension and a worsening in the economic
5
Case studies were carried out on the basis of the data gathered using traditional multivariate
and descriptive statistic techniques. For these studies, see Addabbo et al. (2006), Bigarelli et al.
(2009) and Bertolini et al. (2008).
Table 12.2 Correlation between different quality-of-work dimensions

Comp. w-l.b Econ. Erg. Org. Soc. q.w.
complexity 1.00
Work-life balance 0.39 1.00
Economic 0.60 0.46 1.00
Ergonomic 0.32 0.42 0.26 1.00
Organisation 0.61 0.48 0.44 0.35 1.00
Social 0.59 0.58 0.63 0.35 0.82 1.00
Quality of work 0.74 0.69 0.70 0.59 0.78 0.83 1.00
Table 12.3 Dimensions of the quality of work for women (total and voluntary part-time)
Women Women PT voluntary
Variable Mean Std. Dev. Mean Std. Dev.
Complexity 0.55 0.18 0.57 0.16
Work-life balance 0.52 0.17 0.64 0.16
Economic 0.42 0.17 0.40 0.13
Ergonomic 0.57 0.23 0.61 0.24
Organisational 0.57 0.20 0.60 0.15
Social 0.55 0.17 0.57 0.13
Quality of work 0.54 0.18 0.57 0.15
dimension (Table 12.3). This result is in line with the empirical studies carried out
in other parts of the country, and it may be linked to the same motivations that
push women (especially in the Centre and North) to offer part-time work in their
unpaid care work which are more easily reconcilable with part-time paid working
hours. The micro-data gathered make it possible to detect to what extent part-time
or full-time contracts are voluntary, and show that more than the type of work
contract itself, it is the involuntary nature of working hours that negatively
influences the output of the various dimensions.
Lastly, the evidence gathered in these analyses does not show the existence of
compensating wage differentials, but rather seems to indicate the presence of a job
market segmentation between standard and non-standard employment, and between
different qualifications.
The OLS estimate of the same multivariate model for the analysis of the factors
which influence the value of the various dimensions allows us to verify its weight
and, by checking personal and company characteristics, to verify to what extent
jobs that differ in contractual, qualification or content terms may be low skilled/
routinary (defining as low skilled/routinary the jobs in which the interviewee states
that s/he carries out exclusively operational activities and not to have ever—or
only rarely—had the chance to intervene in problem-solving) and may reach a
different level of development in those dimensions that (in the model which we
propose) comprise the quality of work.
Table 12.4 OLS models on the quality-of-work dimensions
254
W.L. Balance Economic Complexity Ergonomic Organis. Social Quality

Woman -0.023 -0.008 -0.001 -0.011 -0.008 0.010 -0.004
(1.01) (0.36) (0.04) (0.34) (0.36) (0.42) (0.16)
Temporary -0.022 -0.033 -0.024 0.037 0.030 -0.013 0.010
(0.57) (1.09) (0.56) (0.74) (1.03) (0.40) (0.28)
Woman working part time 0.051 -0.023 -0.069* 0.018 -0.046 -0.025 -0.026
(1.78) (0.81) (2.18) (0.44) (1.55) (0.93) (0.83)
Age -0.002 -0.002* -0.001 -0.000 -0.002* -0.003** -0.002*
(1.74) (2.18) (0.77) (0.05) (2.45) (3.30) (2.27)
Woman with children -0.023 -0.003 0.007 -0.014 -0.004 -0.012 -0.009
(1.94) (0.20) (0.47) (0.64) (0.28) (0.95) (0.59)
High school 0.015 -0.020 -0.002 0.079* 0.009 -0.025 0.019
(0.64) (0.88) (0.10) (2.53) (0.37) (1.07) (0.70)
Degree -0.015 -0.011 -0.055 0.037 -0.021 -0.037 -0.024
(0.49) (0.37) (1.76) (0.90) (0.64) (1.22) (0.71)
Low skilled/routinary -0.031 -0.040* -0.071** 0.001 -0.117** -0.077** -0.068**
(1.55) (2.08) (3.68) (0.05) (5.96) (3.97) (2.97)
Managerial 0.082* 0.110* 0.160** 0.139* 0.230** 0.186** 0.176**
(2.07) (2.32) (2.82) (2.24) (6.42) (4.40) (4.27)
White collar 0.022 -0.007 0.071** 0.045 0.036 0.011 0.038
(0.92) (0.30) (3.09) (1.39) (1.39) (0.48) (1.43)
High respons. 0.051 0.009 0.073** 0.083* 0.056 0.039 0.078**
(1.85) (0.33) (2.81) (2.19) (1.88) (1.49) (2.60)
(continued)
T. Addabbo and G. Solinas
12
W.L. Balance Economic Complexity Ergonomic Organis. Social Quality

More than 100 0.119** 0.180** 0.179** 0.135** 0.113** 0.078* 0.161**
Employees (3.42) (5.46) (5.49) (2.94) (3.37) (2.56) (5.01)
Constant 0.399** 0.374** 0.353** 0.340** 0.511** 0.582** 0.407**
(6.87) (7.02) (6.45) (4.45) (9.54) (11.41) (7.32)
Observations 411 412 411 403 409 411 414
R-squared 0.27 0.22 0.23 0.12 0.26 0.20 0.22
Robust t statistics in parentheses; * significant at 5%; ** significant at 1%
Non-Standard Employment and Quality of Work
255
The multivariate analysis highlights how while for certain types of contract
(specifically for women working part-time), there seems to be a sort of compen-
sation between an improvement in terms of reconciliation, yet accompanied by a
worsening in the complexity dimension (in this regard, suffice to think of the part-
time work carried out by women, most likely on their own behalf, given the
current division of unpaid domestic and care work, in order to reconcile family
time and working hours). For other types of work, such as merely low skilled work
(Table 12.4) or employment contracts characterised by unchosen working times
(be they full or part-time) we rather witness a lower value of fuzzy indicators in
more than one dimension. It may be noted how in the case of merely routinary
work, apart from the ergonomic dimension, the value assumed by all the quality of
work dimensions worsens (Table 12.4). Considering the work-life balance
dimension, the worst result for routinary jobs is in line with that to be found in the
literature (Roberts 2007; Warren 2003). The same worst situation in terms of
work-life balance experienced by women with children is in keeping with their
greater exposition to reconciliation problems, felt more acutely by the ‘‘main
carer’’ (Roberts 2007). These results are in line with the existence of segmentation
and clustering of the worst working conditions in several employment positions.
12.6 Conclusions
In this chapter we started out from the definition of the quality of work as put
forward by Gallino, which includes six dimensions: the economic dimension, that
of complexity, organisation and ergonomics, while introducing two new dimen-
sions: the social dimension and that of the work-life balance.
The empirical literature on the quality of work has made use of statistical and
econometric techniques as well as drawing on the availability of surveys dedicated
to the measurement of working conditions, or ones from which subjective
judgements on the level of job satisfaction could be inferred.
In this essay, we chose to experiment with fuzzy logic in order to maintain the
complexity of the definition adopted of quality of work and—through a complex
methodology—come to the measurement of the various dimensions, thus with the
use of descriptive statistics and multivariate analysis making it possible to interpret
their values with particular reference to the non-standard forms of employment
observed. This reading, albeit carried out on a limited number of cases and not
chosen at random from the entire population of reference, leads us to identify low-
quality jobs. Part-time work produces an improvement for women in the work-life
balance dimension at the expense of the economic dimension. Lastly, the evidence
gathered in this analysis does not indicate the existence of compensating wage
differentials, but rather seems to indicate the presence of a job market segmen-
tation between standard and non-standard employment and between different types
of qualification.
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Chapter 13
Is There a Trade-Off Between Labour
Flexibility and Productivity Growth?
Some Evidence from Italian Firms
Federico Lucidi
13.1 Introduction
The Italian economy has been experiencing a serious slowdown of labour pro-
ductivity growth since the end of the 1990s, when it started to diverge from the
trend of other industrialized countries, and has become even negative in most
recent years. Worryingly, this phenomenon does not appear to be short-term or due
to the negative economic cycle; rather, it seems to be caused by structural factors.
Indeed, various indicators (for example, Italy’s declining share of world trade, and
poor performances in terms of R&D spending and patenting activity) point to a
general deterioration in Italy’s competitive position, as recognized by some
authors (Faini and Sapir 2005; Barca 2005).
The anatomy of the productivity slowdown is evinced by Fig. 13.1, where the
average growth of value added per equivalent labour unit has been decomposed,
using a shift-share procedure,1 into three components (labour productivity growth
within sectors, reallocation of the labour force to higher productivity industries,
and a residual or ‘interaction’ effect). It emerges that the average annual increase
of labour productivity (the sum of the three components) slowed down from 1.9%
in the period 1992–1996 to 0.9% in the years 1996–2000, and then to virtually
zero (0.02%) in the last interval, 2000–2004. It should be noted that, while the
I wish to thank Area Studi Capitalia for generously giving me access to their firms’ database.
I am grateful to Marcella Corsi, Alfred Kleinknecht, Paolo Piacentini, Andrea Salvatori and
Leonello Tronti for useful comments and discussions.
1
For details, see Appendix A.
F. Lucidi (&)
Fondazione Giacomo Brodolini, viale di Villa Massimo 21, 00161 Rome, Italy
e-mail: lucidi@fondazionebrodolini.it
262 F. Lucidi
Fig. 13.1 Decomposition of

labour productivity growth
(2-digit sectors, 1984–2004)
Source Own calculations on
Istat data. See Appendix A
for details
reallocation effect remained positive and did not change excessively during the last
three periods, the intra-industry component, which should reflect technological
advance inside sectors, seems to be the one most affected by the slowdown and
even exhibits a negative value in 2000–2004.
Surprisingly, this trend followed a decade of intense reforms which shifted the
Italian model from a ‘managed economy’, where public intervention was perva-
sive, to a ‘common sense’ market model aimed at increasing competition and
efficiency by reducing rigidities in both the labour and goods markets. In partic-
ular, the labour market underwent radical transformations during this period. First
of all, wage bargaining institutions were profoundly changed by the tripartite
agreements of 1992 and 1993, which marked the end of the automatic wage
indexation system (scala mobile) which dated back to the mid-1970s. The new
bargaining arrangements gave national labour contracts the sole purpose of
maintaining the purchasing power of real wages, while the distribution of com-
pany-level productivity increases to workers was left to decentralized firm-level
agreements (not compulsory for firms, however). At the same time, an increase in
labour flexibility was pursued through the laws 196/1997, 368/2001 and 30/2003,
which deregulated the adoption of fixed-term contracts, allowed the use of tem-
porary agency workers, and introduced new ‘atypical’ contractual arrangements.
In the mainstream view, the decentralization of wage-setting institutions and
greater flexibility, in both wages and numerically, were needed to cope with the
unemployment crisis of the early 1990s, whose causes (according to the dominant
paradigm of ‘supply-side’ policies) were considered to be mainly structural.
Undoubtedly, the conditions of the Italian labour market significantly improved in
the last 10 years, with the unemployment rate decreasing from 11.2% in 1995 to
7.7% in 2005, and the employment rate increasing in the same period from 51.8 to
57.5% (but still largely falling short of the Lisbon target). Nonetheless, this
improvement occurred at the expense of real wage growth: a phase of significant
wage moderation followed the changes made to contractual arrangements, causing
real wages to increase on average less than labour productivity and leading to a
decline of the labour share on national income (Tronti 2007). The magnitude of the
wage restraint period also appears significant in light of an international
13 Is There a Trade-Off Between Labour Flexibility and Productivity Growth 263
Fig. 13.2 Labour productivity growth versus share of fixed-term workers (1993–2004) Source
Istat. (Note: a break in LFS series occurred in 2004)
comparison which ranks Italy last among industrialized countries for real wage
growth during the decade 1992–2002 (Zenezini 2004).
Employment growth has been accompanied by the increased use of fixed-term
and atypical jobs; in particular, the share of fixed-term employees over total
employees (excluding freelance workers and other ‘atypical’ categories, which in
the labour force survey are classified as self-employment) increased by five
percentage points from 7.3% in 1995 to 12.3% in 2005.2
Therefore, wage moderation and the increase of external labour flexibility
appear to be among the main institutional changes that have occurred in the Italian
labour market over the last 15 years. However, if their role in boosting employ-
ment has been emphasised (on the quantitative side; conversely, the debate on the
‘quality’ of the new jobs is still ongoing), their impact on the productive system
has often been neglected, from both the theoretical and empirical viewpoints. But
in the present context, labour market reforms do not appear to have been neutral
with respect to the productivity slowdown. In fact, various theoretical arguments
suggest that the prolonged period of wage moderation and increased numerical
flexibility curbed the incentives of firms to innovate, while providing incentives to
compete by adopting ‘low road’ practices: cutting labour costs, maintaining low-
productive jobs, and reducing the scope for training and high quality human
resource management practices.
A general idea of the potential trade-off between flexibility and productivity
growth is provided by Fig. 13.2, where the correlation between the slowdown of
labour productivity growth and the increased incidence of fixed-term contracts is
evident.
Empirical testing using firm-level data appears the most adequate strategy to
provide robust evidence on these relationships. This paper therefore presents
results of productivity growth estimates using data from the ninth ‘‘Indagine sulle
2
The values are not fully comparable owing to a break in the Istat Labour Force Survey (LFS) in
2004.
264 F. Lucidi
imprese manifatturiere’’, conducted by the Capitalia Bank Research Centre (for-

merly Mediocredito Centrale) in the period 2001–2003, where ‘flexibility’ indi-
cators are included among the factors explaining labour productivity growth at
firm level.
The structure of the paper is as follows. Section 13.2 provides a theoretical
background for the linkage among wage moderation, labour flexibility, innovative
activity and productivity growth. The dataset and the variables used for the
empirical estimation are described in Sect. 13.3, while the model is presented and
the results are discussed in Sect. 13.4. A concluding section summarizes and draws
some policy implications.
13.2 Theoretical Background
Various kinds and sources of ‘labour flexibility’ can be identified. In particular, it

is common practice to divide labour flexibility practices into three categories
(Beatson 1995): ‘numerical’ (external) flexibility, which enables firms to easily
adjust the number of employees in response to changes, and depends on the
strictness of legislation on hiring and firing, fixed-term contracts and working
hours; ‘functional’ (internal) flexibility, which concerns the possibility to reorga-
nize the workforce internally by means of internal training and the development of
multi-skilled employees; ‘wage’ flexibility, which concerns the responsiveness of
wages to external shocks (however, this is commonly perceived as ‘downward’
flexibility), largely depending on the features of the wage-setting institutions.
The reforms undertaken in Italy over the past 15 years have concerned the first
and the last of these aspects. However, whilst the effects of labour market reforms
on increased numerical flexibility are unambiguous, the issue of wage flexibility is
more complex. The changes made to the wage-setting institutions at the beginning
of the 1990s aimed at increasing wage flexibility at the firm level by explicitly
providing for the company-level distribution of labour productivity increases to
workers. However, decentralized bargaining was little used (in particular among
smaller firms), so that the Italian wage-setting system remained highly centralized
(at least for inflation compensation). What one observes 15 years later is therefore
a long period of ‘institutional’ wage moderation (Zenezini 2004; Tronti 2007;
Brandolini et al. 2007).
Another key explanation for the wage restraint period resides in the new climate
of industrial relations, which, after a long period of conflict, gradually became
more cooperative from the early 1990s onwards. This new industrial-relations
environment fostered wage moderation during the 1990s by allowing the sys-
tematic underestimation of the forecast inflation rate, which is a pillar of the new
bargaining system (Brandolini et al. 2007). Hence, wage moderation was institu-
tionally grounded, and can only partly be explained by increased wage flexibility
at firm level (Zenezini 2004).
With these concepts in mind, the rest of the paper will focus on external
flexibility and wage moderation as possible explanations for the poor productivity
performance of Italian firms.3 There is no bias in considering these two causes as a
priori positively correlated: from a theoretical point of view, the correlation can
take place in both directions. If temporary contracts are used mainly with low-
skilled or low-productivity workers, or entail lower social security contributions
for employers, then the increase in external flexibility will be correlated with a
reduction in firms’ wage bills. But the reverse case may occur if workers accepting
temporary jobs are likely, ceteris paribus, to demand a risk premium to off-set the
chance of not being hired permanently on expiry of their temporary contracts
(compensating differentials theory). Nonetheless, empirical evidence from other
countries (Segal and Sullivan 1995; Sànchez and Toharia 2000; Booth et al. 2002;
McGinnity and Mertens 2004; Addison and Surfield 2005; Kleinknecht et al. 2006)
and from Italy (Picchio 2006) shows that fixed-term workers, on average, earn less
than regular workers even after observed and unobserved personal characteristics
have been controlled for.
On these bases, it seems possible to identify four theoretical headings under
which to explain the direct and indirect effects of wage moderation and external
labour flexibility on productivity growth. These four transmission channels involve
effects on firms’ innovative activity, internal training, workplace cooperation, and
patterns of aggregate demand.
Under the first heading, according to Sylos Labini (1984, 1993, 1999), wage
increases (in particular with respect to the price of ‘machinery’) are a major
stimulus for the adoption of technological innovations intended to save labour both
in absolute terms (by increasing workplace efficiency) and relative ones (by
dynamically substituting labour with capital4). This process is influenced by firms’
market power, in particular by the capacity to transfer labour cost increases onto
prices by means of mark-up pricing. In a competitive environment, therefore,
entrepreneurs will have a greater incentive to enhance labour productivity in order
to preserve their profit share. Bhaduri (2006) has recently proposed a model of
endogenous growth built on an mechanism of this kind.
Moreover, from a Schumpeterian perspective, one can argue that high real wage
growth and labour market rigidity may foster, to a certain extent, the process of
creative destruction and favour the adoption of innovations by firms (Kleinknecht
1998; Naastepad and Kleinknecht 2004; Kleinknecht et al. 2006). On this view,
3
Functional flexibility is not considered in this paper owing to the absence of information in the
dataset used for the empirical estimation. However, various studies (Bassanini and Ernst 2002;
Michie and Sheehan 2003; Kleinknecht et al. 2006; Cristini et al. 2003) suggest that the linkage
between functional flexibility and firm performance may act with an opposite sign, i.e. it provides
a favourable environment for productivity increases.
4
Note that the dynamic substitution between capital and labour, in this context, differs from the
static substitution, with constant technology, implied by the neoclassical theory as a response to
the relative variation in the prices of factors. The former, in fact, involves technological change
incorporated in new capital goods (Sylos Labini 1993).
266 F. Lucidi
innovative firms compete better in a context of higher costs (both labour costs and
adjustment costs due to stricter regulation). By contrast, looser regulation and
(downward) wage flexibility can be considered as a ‘grant’ to low-productive firms
competing through ‘low-road’ practices (for example, passive price strategies, to
be achieved by cutting labour costs, and limited innovative activity: Antonucci and
Pianta 2002 and Pianta 2003). The outcomes of innovation are uncertain, whilst
the gains in competitiveness deriving from a cut in labour costs—both explicit
(due to wage moderation) and implicit (due to the reduction of firing costs)—are
immediate and unquestionable, even if presumably short-lived. Hence slack labour
market regulation may be an important incentive to entrepreneurs with short time-
horizons to follow the ‘low road’ path, preferring cost scrapping to innovation.
Ramazzotti (2005) has conducted a detailed analysis of different firm strategies
and choices in this context.
The standard view on this matter generally suggests an alternative position:
namely that greater labour market rigidity may have negative effects on produc-
tivity because it hampers the reallocation of labour ‘‘from old and declining sectors
to new and dynamic ones’’ (for a review of the effects of labour market institutions
on economic performance see Nickell and Layard 1999). However, while this
effect may be apparent at a higher level of aggregation, it does not seem relevant
when the performance of individual firms within a given sector is considered.
Some authors also argue that, in rigid labour markets, the adjustment costs arising
from the adoption of a new technology may inhibit the innovative process itself
(Scarpetta and Tressel 2004). As regards wage bargaining institutions, a similar
mechanism may be at work if decentralized unions appropriate the rents deriving
from productivity gains (this is the classical hold-up problem: for literature surveys
see Metcalf 2002 and Menezes-Filho and Van Reenen 2003). Nonetheless, the real
occurrence of these effects depends closely on the extent to which the wage-setting
actors are centralized and coordinated, on the nature of industrial relations, on
whether employees can be internally reassigned (‘functional’ flexibility), and
whether internal activities can be contracted out. This position has also been
challenged by part of the neoclassical literature: for example, a model that
explicitly links the presence of firing costs with greater scope for process inno-
vation has been presented by Saint-Paul (2002).
Turning to the second heading, it appears obvious that labour flexibility impacts
on training and human capital accumulation. If labour relationships are expected to
be short-lived, there is little incentive for firms to invest in both the general and
specific training of their workforces (firms need an adequate pay-back period in
order to recoup their investment costs). Workers, for their part, will be reluctant to
acquire firm-specific skills if they do not feel a long-term commitment to their
employers. Similar conclusions hold if we hypothesise that higher labour
flexibility (in particular, along the wage dimension) reduces the compression of
the wage structure (both within and between firms), which is one of the main
reasons for the provision of firm sponsored training (Acemoglu and Pischke 1999;
Agell 1999). The result of higher labour flexibility could therefore be an under-
provision of on-the-job training, with potentially negative effects on productivity
growth. Empirical evidence of a negative correlation between fixed-term

employment and the probability of receiving work-related training has been pro-
vided for the UK by Arulampalam and Booth (1998) and Booth et al. (2002).
As to the effects of labour flexibility on productivity via workplace cooper-
ation, a strand in the literature supports the idea that productivity-enhancing
effects ensue from ‘high trust’ or ‘high road’ human resources management
practices, and from cooperative labour relations (Huselid 1995; Buchele and
Christiansen 1999a; Lorenz 1999; Michie and Sheehan 2001, 2003; Naastepad
and Storm 2005). According to these theories, higher on-the-job protection
and subsequent cooperative relationships between management and employees
may positively affect firm performance, encouraging innovative activity and
promoting efficiency gains.
Finally, it is important to note that wage moderation and labour flexibility may
have negative effects on aggregate demand, both directly and indirectly (for
example, through increases in precautionary saving by employees with temporary
jobs). And, through this channel, they may negatively affect labour productivity
growth. Various theories suggest that there is a direct link among demand growth,
innovation and labour productivity growth, both in the context of dynamic
increasing returns (via the so-called ‘Verdoorn–Kaldor law’) and on a demand-pull
hypothesis concerning innovative activity (Schmookler 1966; Brouwer and
Kleinknecht 1999).
A number of empirical analyses have been conducted on the effects of labour
flexibility on productivity dynamics (both measured as labour productivity and
TFP) or on the innovative activity of firms. However, the majority of these studies
focus on the country or sectoral level (Buchele and Christiansen 1999a, b; Nickell
and Layard 1999; Bassanini and Ernst 2002; Scarpetta and Tressel 2004; Auer
et al. 2005; Naastepad and Storm 2005),5 and only a few report firm-level evi-
dence. In particular, Michie and Sheehan (2001, 2003) studied the impact of
various flexibility practices on innovation indicators for British firms, evidencing a
negative effect of external flexibility and a positive effect of functional flexibility.
Similar results have been obtained with reference to labour productivity growth
by Dekker and Kleinknecht (2004) and Kleinknecht et al. (2006) for Dutch
firms. Finally, Arvanitis (2005) found a positive relationship between functional
flexibility and labour productivity for a sample of Swiss companies, but a not
significant effect of external flexibility.
5
Most of these studies observe a positive effect of employment protection (measured by the
Oecd index or other indicators) on productivity growth or innovation indicators. Auer et al.
(2005) find a positive (though decreasing) relation between job stability, measured as average
tenure, and labour productivity. Scarpetta and Tressel (2004), however, report a negative effect of
employment protection, mainly in countries with sectoral and uncoordinated wage bargaining.
The distinction among different industrial relations models is also considered by Bassanini and
Ernst (2002), who conclude that Epl (employment protection) strictness is significantly correlated
to technological specialization in countries with coordinated relations.
268 F. Lucidi
13.3 The Data
The data used for the empirical analysis are taken from the ninth ‘‘Indagine sulle
imprese manifatturiere’’, a survey of manufacturing firms conducted by Capitalia
Bank Research Centre and covering the period 2001–2003. The Capitalia sample,
which includes 4,289 firms, is representative of Italian manufacturing companies
with more than 10 employees. Firms are selected by means of a stratification
method by industry, geographic area and firm size.
The survey provides information under different headings. In particular, it
includes full information on workforce composition by contract type (full-time or
part-time, permanent or temporary), hirings and lay-offs, sales, investments in
fixed capital, R&D expenditure and other innovation indicators. Unfortunately, it
does not contain information on working hours, while information on temporary
agency workers and freelance workers is only available for 2003, and therefore
could not be used for my analysis.6
Using fiscal codes as identifiers, the Capitalia survey was then merged with
balance sheet data from the Bureau Van Dijk AIDA dataset (which contains
balance sheet data for firms with turnovers higher than 500,000€), to obtain some
variables necessary for the empirical analysis (in particular, value added and
labour costs). The number of firms with complete balance sheet data for the
3 years was 3,351. As evident from Table 13.1, this operation did not produce
significant modifications in the composition of the sample by size class,
geographic area and sector (according to the Pavitt taxonomy). However, when
account was taken of the presence of missing values in some of the variables of
interest, the total number of firms reduced further, according to the different
specifications of the model, to around 2,600 firms when using a full specification
(see Sect. 13.4 for details).
In order to estimate productivity regressions, monetary variables were stan-
dardized by the number of employees (value added, investments, labour costs) or
by the amount of sales (R&D expenditure) and deflated using the appropriate price
and total labour turnover) were created. Extreme and unreliable values were
cleaned from variables by using a trimming procedure which excluded observa-
tions falling outside the first and last 0.5 percentiles (an analogous method has
been used on the Capitalia survey data by, for example, Parisi et al. 2006 and
Benfratello et al. 2005). A complete list of the variables, with detailed information
and descriptive statistics, is given in the Appendix.
6
No attempt was made to merge with the previous wave of the survey (which covered the period
1998–2000) because, given the high incidence in this survey of missing values in flexibility
variables, the number of firms for which full information was available over the 6 years was
remarkably low (around 350).
Table 13.1 Percentage composition of the sample by size class, geographic area and sector
Full sample (n = 4,289) With balance sheets (n = 3,351)
11–20 employees 20.9 20.2
21–50 employees 30.9 31.7
51–250 employees 37.0 37.1
251–500 employees 5.2 5.0
More than 500 employees 6.1 6.0
Total 100.0 100.0
North–West 35.9 35.3
North–East 30.1 32.1
Centre 17.6 18.0
South 16.4 14.7
Total 100.0 100.0
Traditional sectors 51.2 51.1
Scale sectors 17.6 17.5
Specialized supply 27.1 27.5
High technology 4.1 3.8
Total 100.0 100.0
According to the Pavitt taxonomy
13.4 The Model
The approach used to estimate productivity equations was a modification of

Sylos Labini’s (1984, 1993, 1999) equations for the determinants of labour
productivity growth, adapted for use with microdata and amended with the
inclusion of variables not considered in the original model (in particular, two
indicators of external labour flexibility). Differently from models based on the
production function, Sylos Labini’s model explains productivity growth by
means of three components. Specifically, productivity increases depend on: the
variation of wages relative to the price of investment goods (‘Ricardo effect’);
the growth of aggregate demand, in order to verify the occurrence of dynamic
increasing returns [‘Smith effect’, corresponding to the Verdoorn law (Verdoorn
1949)]; investment expenditures, in order to consider the impact of new tech-
nology embodied in new fixed capital and not captured by the other factors.
The original model was estimated (at macro level) with different lag structures
in order to consider delayed effects of the explanatory variables on productivity
growth.
My application of this model to microdata involved three considerations.
Firstly, monetary variables had to be standardized in order to take firm size into
account (as explained in Sect. 13.3). Secondly, the absence of information on
working hours required the use of value added per employee (and not per
270 F. Lucidi
worked hour, as would have been suitable) as a measure of labour productiv-

ity.7 Thirdly, and most importantly, right-hand variables comprised a large
degree of endogeneity, which appears to be critical for wages (at least theo-
retically, since in Italy productivity-related wage increases seem rather moderate
and are likely to occur only in medium–large firms). In view of the shortness of
the panel, the solution chosen to minimize endogeneity problems was simply to
carry out OLS cross-section regressions for the growth rate of labour produc-
tivity in the period 2001–2003 using lagged values (taken in 2001) of the
regressors. This solution appeared to be valid in the absence of serial corre-
lation of the residuals, which, however, cannot be tested in a cross-section
framework. Considering productivity growth over 3 years (2001–2003) also
allowed partial control to be made for the volatility of labour productivity at the
firm level (labour hoarding is likely to occur in this context, since firms are
unable or unwilling to adjust their workforces in the very short term). More-
over, this approach allowed account to be taken of a lag before the effects of
right-hand variables on productivity growth become observable.8
The empirical specification of the model modified Sylos Labini’s original
equation in various respects. Firstly, the initial level of value added per employee
was included in order to allow for technological catch-up among firms.9 With
regard to ‘cost-driven’ increases in productivity, given the impossibility of con-
structing an index of wage costs relative to capital costs at firm level, an indicator
of real labour costs per employee was used instead.10 This variable was included
both in lagged levels (taken in 2001) and in growth rates over the period 1998–
2000 (taken from balance sheet data). As regards ‘demand-driven’ effects on
productivity growth, the growth of sectoral value added at 2-digit level (taken from
Istat national accounts) was included in order to consider the effects of markets
7
This limitation would be more serious if I had been trying to explain the determinants of the
labour productivity level, instead of its growth rate. However, attempts to take account of the
number of part-time employees in measuring labour productivity (e.g. considering a part-time
worker to be half a full-time worker) did not produce significant changes in the coefficient
estimates. Therefore, in order to avoid too demanding assumptions, the straightforward indicator
of value added per employee was used for the estimations.
8
Unfortunately, the short time horizon (3 years) and the presence of the lagged dependent
variable among the regressors precluded the use of panel methodologies to take individual firms’
effects into account.
9
The inclusion of lagged productivity, which was always highly significant, probably also
allowed control for the (unobserved) variation in the utilisation of productive capacity during the
period. This consideration can be easily explained. If, for instance, a firm has an abnormally low
(or high) productivity level at the beginning of the period for transitory reasons (e.g.
restructuring, temporary difficulties, etc.), and then returns to its ‘normal’ level, one might
erroneously infer that its productivity has strongly increased (decreased), whereas the variation
has been mainly induced by the fluctuation in the utilisation of its productive capacity. The
inclusion of lagged productivity, at least theoretically, could allow one to control for this
phenomenon.
10
Sylos Labini (1984, 1993) considers both indicators in the theory, while excluding one of
them in the empirical analysis owing to their high collinearity.
expansion11 on firm level productivity (Smith–Verdoorn effect). This variable was

considered instead of industry dummies in order to avoid multicollinearity prob-
lems. As for the ‘investment-driven’ effects on productivity growth, investments in
equipment and machinery per employee were considered. The baseline model was
completed by including R&D expenditure over sales as an indicator of innovative
activity inside firms.
For the specific purposes of the analysis reported here, two indicators of
external labour flexibility were included among the right-hand side variables,
namely the share of employees on temporary contracts, and a measure of total
labour turnover (the sum of hirings and layoffs divided by the number of
employees). Finally, dummies for industry, size class, geographic area and firm
age were included as controls.
The empirical specification of the model was therefore:
D0103 ln pijt ¼a þ b1 ln pijt2 þ x0ijt2 b2 þ flex0ijt2 b3

þ b4 D0103 ln yjt þ d0i c þ eijt ;
where the growth of value added per employee between 2001 and 2003 in firm
i belonging to sector j (measured as a logarithmic difference) is explained by the
lagged level of (log) value added per employee, by a vector of lagged variables
xijt2 (including investments per employee, R&D/sales and one of the two indi-
cators for real labour costs per employee), by a vector of lagged flexibility indi-
cators flexijt2 (the share of employees on fixed-term contracts and the indicator of
total turnover), by the growth of sectoral value added D0103 ln yjt (rather than
industry dummies) and by a vector of firm-specific dummies di Robust standard
errors were calculated (the White/Koenker statistic always rejected the null of no
heteroskedasticity).
In a second step, I allowed for heterogeneity in the flexibility coefficients by
making them interact with a dummy for firms performing R&D activity (as in
Kleinknecht et al. 2006) in order to verify different response patterns to flexibility
practices in innovating versus non-innovating firms.12 In fact, it is possible to
hypothesise that in innovative, more dynamic firms, external flexibility is not
necessarily a ‘low-road’ practice with detrimental effects on productivity. Indeed,
in the case of R&D firms, more flexibility is likely to ease the acquisition of
11
This variable was considered to be exogenous, assuming as irrelevant the effect of the single
firm’s performance on value added at industry level. However, this may be false for larger firms
and in more concentrated sectors. Nonetheless, all the specifications were also estimated without
this variable in order to make comparison possible.
12
Different innovation indicators were tested in order to include these interaction terms: in
particular, two dummies for firms declaring that they had introduced process or product
innovations during the reference period. However, the dummy for firms performing R&D
activities appears to discriminate the coefficients under the two headings better, maybe because it
more closely reflects the attitude to continuous innovative activity inside firms.
272 F. Lucidi
knowledge workers (for whom mobility may not necessarily be a ‘bad’), as

opposed to non-R&D firms, where it appears functional to saving on labour costs.
Several specifications of this model were estimated. Table 13.2 shows the
outcomes of estimations using the level of real labour costs per employee among
the regressors. The first column reports the coefficients of the baseline model,
without R&D and flexibility indicators, in order to have a benchmark with the
highest number of observations (more than 3,000). As will be seen from
Table 13.2, all the coefficients exhibit the expected sign and are strongly signifi-
cant. In particular, there appears to be a negative effect of the initial productivity
level, which suggests that firms lagging behind at the beginning of the period are
actually growing faster, i.e. some sort of catch-up process may be at work. The
effect of investments in fixed capital (expressed in thousands of euros, without
taking logarithms in order to avoid the exclusion of non-investing firms) is positive
as expected, and so is the effect of the initial level of labour costs per employee.
The latter finding indicates that firms facing higher labour costs at the beginning of
the period display, on average, higher productivity growth, consistently with the
theoretical considerations previously outlined.
In regard to the other controls, significant scale effects appear to operate: firm
size (over 50 employees) matters for labour productivity growth, with increasing
magnitude along the firm dimension. There is also strong evidence that younger
firms (under 25 years old) perform significantly better than older ones, suggesting
their (expected) higher dynamism in acquiring market shares as opposed to the
incumbents. Coefficients on regional dummies (four macro areas) are never
reported because of their insignificance at the conventional levels,13 while industry
controls (also not reported) show an outperforming result for refinery, chemicals
and pharmaceuticals, rubber and plastic products, and basic metal companies
against the reference industry (food products).
The baseline model was then completed with R&D and flexibility indicators. As
evident from Table 13.2, R&D expenditure over sales never exerts a significantly
positive effect on labour productivity growth. However, this may simply stem from
bad measurement of this variable (firms may include other kinds of expenditures in
their declared R&D), or from the fact that higher R&D expenditure by itself
does not necessarily imply the adoption of innovative processes or products
(i.e. ‘successful’ R&D).14
As regards labour flexibility variables, on the other hand, the estimates show
that both the incidence of fixed-term contracts and total labour turnover, when
taken separately, are negatively (and significantly) correlated with productivity
growth. However, when both variables are included, the effect of the fixed-term
share seems to dominate that of labour turnover, which becomes insignificant; this
13
Regional controls are indeed significant in explaining labour productivity levels, where
Southern regions rank behind Northern and Central ones.
14
Moreover, if R&D expenditures are idiosyncratic to sectors rather than to individual firms,
their effect could be captured by industry controls: in fact, on removing industry dummies, the
effect of R&D turns positive, yet not statistically significant.
13
Table 13.2 Determinants of labour productivity growth (value added per employee) between 2001 and 2003
(1) (2) (3) (4) (5) (6) (7)
Log value added per worker (2001) -0.323*** -0.337*** -0.335*** -0.335*** -0.280*** -0.278*** -0.278***
(0.026) (0.028) (0.028) (0.028) (0.028) (0.028) (0.028)
Investment per worker (2001) 0.003*** 0.003*** 0.003*** 0.003*** 0.003*** 0.003*** 0.003***
(0.001) (0.001) (0.001) (0.001) (0.001) (0.001) (0.001)
Log labour cost per worker (2001) 0.129*** 0.149*** 0.148*** 0.143*** 0.115*** 0.113*** 0.110***
(0.035) (0.037) (0.038) (0.038) (0.036) (0.037) (0.037)
R&D/Sales (2001) -0.033 -0.054 -0.012 0.256 0.221 0.271
(0.419) (0.406) (0.420) (0.434) (0.421) (0.435)
Share of employees on fixed–term -0.178*** -0.159** -0.159*** -0.138**
contracts (2001) (0.059) (0.062) (0.060) (0.065)
Total labour turnover (2001) -0.068** -0.038 -0.068** -0.040
(0.032) (0.033) (0.032) (0.035)
Growth of sectoral value added 0.918*** 0.901*** 0.918***
(2001–2003) (0.112) (0.112) (0.113)
Size: 21–50 employees 0.021 0.012 0.014 0.013 0.011 0.013 0.012
(0.016) (0.016) (0.016) (0.016) (0.017) (0.017) (0.017)
Size: 51–250 employees 0.047*** 0.041*** 0.042*** 0.042*** 0.037** 0.038** 0.038**
(0.015) (0.016) (0.016) (0.016) (0.016) (0.016) (0.016)
Size: 251–500 employees 0.063** 0.059** 0.059** 0.059** 0.067** 0.066** 0.066**
(0.027) (0.029) (0.029) (0.029) (0.029) (0.029) (0.029)
Size: more than 500 employees 0.113*** 0.104*** 0.106*** 0.106*** 0.110*** 0.112*** 0.112***
(reference: less than 21) (0.028) (0.036) (0.037) (0.037) (0.037) (0.037) (0.037)
Age: 25–40 years –0.045*** –0.042*** –0.043*** –0.042*** –0.045*** –0.045*** –0.044***
Is There a Trade-Off Between Labour Flexibility and Productivity Growth
(0.015) (0.016) (0.016) (0.016) (0.016) (0.016) (0.016)

Age: more than 40 years -0.057*** -0.052*** -0.053*** -0.052*** -0.048*** -0.049*** -0.048***
(continued)
273
274
(1) (2) (3) (4) (5) (6) (7)

Constant 0.890*** 0.857*** 0.860*** 0.874*** 0.666*** 0.667*** 0.678***
(0.094) (0.100) (0.101) (0.102) (0.081) (0.081) (0.082)
Sector dummies Yes Yes Yes Yes No No No
Regional dummies Yes Yes Yes Yes Yes Yes Yes
Observations 3,017 2,661 2,654 2,639 2,661 2,654 2,639
F-test (p-value) 12.12 (0.00) 10.45 (0.00) 10.39 (0.00) 10.05 (0.00) 14.10 (0.00) 13.90 (0.00) 12.97 (0.00)
White/Koenker (p-value) 94.31 (0.00) 82.43 (0.00) 84.64 (0.00) 82.86 (0.00) 62.54 (0.00) 64.51 (0.00) 63.02 (0.00)
R-squared 0.18 0.19 0.19 0.19 0.14 0.13 0.13
Robust standard errors in parentheses; *significant at 10%; **significant at 5%; ***significant at 1%
F. Lucidi
effect may be explained by the high level of correlation between the two variables
(rho = 0.37). This finding, however, provides support for the existence of a trade-
off between external flexibility and productivity growth at the firm level.
The model was then re-estimated replacing industry dummies with the growth
of sectoral value added (the last three columns of Table 13.2). The coefficients
suggest a very strong effect of market expansion on firm-level productivity
dynamics. This is evidence for the existence of dynamic increasing returns in
manufacturing, in accordance with the Verdoorn law (or ‘Smith effect’, as Sylos
Labini puts it). However, some considerations counsel caution on the magnitude of
the Verdoorn coefficient, which may be biased due to endogeneity, or may simply
capture short-term variations in the degree of utilisation of productive capacity
(testing the hypothesis of dynamic increasing returns would probably require a
longer time dimension). This consideration applies in particular when one con-
siders the modest growth of value added in the 2001–2003 period. However, the
inclusion of sectoral demand growth did not affect the estimates on the other
variables, in that it induced only a slight reduction in the size of the coefficients on
lagged productivity and labour cost per employee; the R&D coefficients became
positive, yet not significant (this was probably due to the removal of industry
dummies, given the high specificity of R&D expenditure by sectors).
Table 13.3 shows the results of estimation of the same regressions using past
growth rates of labour cost per employee (in the period 1998–2000) among the
right-hand side variables in place of its level in 2001. It should be pointed out that
this variable grounds uniquely on balance sheet information (from the AIDA
dataset), so that the number of employees (used as denominator) may not be fully
comparable with that declared by firms in the Capitalia survey.15 In this case, too,
the results display a positive effect of past ‘wage push’ on productivity growth.
The inclusion of this variable does not affect the coefficients on lagged produc-
tivity level and investments per worker; moreover, the negative impact of fixed-
term share and labour turnover appears to be stronger, although the latter is still not
significant in the full specification. Replacing industry dummies with sectoral
demand growth lowers the effect of past wage increases, but essentially leads to
the same conclusions as above.
Finally, Table 13.4 reports a re-estimation of the model with lagged labour
costs where flexibility indicators were interacted with a dummy for firms per-
forming R&D activities during the period 2001–2003.16 The results show that the
negative effect of numerical flexibility on productivity growth seems to be
restricted to non-R&D firms: in these firms, indeed, the use of flexibility seems
more likely to be functional to the exploitation of ‘low road’ strategies providing
lower incentives to productivity growth.
15
The number of employees in AIDA is counted as an average over the whole year, while in the
Capitalia survey it measures the stock at the end of the year.
16
The model with growth rates of labour cost per employee yielded comparable results.
Table 13.3 Determinants of labour productivity growth (value added per employee) between 2001 and 2003
276
(1) (2) (3) (4) (5) (6) (7)

Log value added per worker (2001) -0.303*** -0.314*** -0.312*** -0.316*** -0.274*** -0.272*** -0.275***
(0.024) (0.026) (0.027) (0.027) (0.025) (0.026) (0.026)
Investment per worker (2001) 0.002*** 0.003*** 0.002*** 0.003*** 0.003*** 0.003*** 0.003***
(0.001) (0.001) (0.001) (0.001) (0.001) (0.001) (0.001)
Growth of labour cost per employeea 0.033** 0.037*** 0.035** 0.035** 0.030** 0.028* 0.028*
(1998–2000) (0.013) (0.014) (0.014) (0.014) (0.015) (0.015) (0.015)
R&D/Sales (2001) 0.276 0.276 0.294 0.604 0.599 0.610
(0.440) (0.433) (0.441) (0.456) (0.448) (0.457)
Share of employees on fixed-term -0.271*** -0.248*** -0.231*** -0.207***
contracts (2001) (0.065) (0.069) (0.065) (0.071)
Total labour turnover (2001) -0.091** -0.047 -0.087** -0.048
(0.038) (0.039) (0.037) (0.039)
Growth of sectoral value added 1.020*** 0.907*** 0.924***
(2001–2003) (0.100) (0.124) (0.125)
Size: 21–50 employees 0.006 -0.004 -0.001 -0.002 -0.002 0.001 -0.001
(0.017) (0.018) (0.018) (0.018) (0.018) (0.018) (0.018)
Size: 51-250 employees 0.048*** 0.041** 0.041** 0.041** 0.035** 0.035** 0.035*
(0.017) (0.017) (0.017) (0.017) (0.018) (0.018) (0.018)
Size: 251–500 employees 0.045 0.040 0.039 0.041 0.048 0.048 0.048
(0.041) (0.042) (0.043) (0.043) (0.043) (0.043) (0.043)
Size: more than 500 employees 0.161*** 0.134*** 0.139*** 0.137*** 0.130*** 0.135*** 0.133***
Age: 25–40 years -0.039** -0.036** -0.037** -0.035* -0.036* -0.037** -0.035*
(0.017) (0.018) (0.018) (0.018) (0.018) (0.019) (0.019)
Age: more than 40 years -0.046** -0.041** -0.043** -0.041** -0.032 -0.033 -0.032
(continued)
F. Lucidi
13

(1) (2) (3) (4) (5) (6) (7)
Constant 1.018*** 1.223*** 1.054*** 1.237*** 0.925*** 1.016*** 1.027***
(0.120) (0.125) (0.158) (0.127) (0.124) (0.101) (0.102)
Sector dummies Yes Yes Yes Yes No No No
Regional dummies Yes Yes Yes Yes Yes Yes Yes
Observations 2,396 2,153 2,145 2,135 2153 2,145 2,135
F-test (p-value) 9.18 (0.00) 7.84 (0.00) 7.72 (0.00) 7.58 (0.00) 11.35 (0.00) 11.13 (0.00) 10.51 (0.00)
White/Koenker (p-value) 83.25 (0.00) 85.80 (0.00) 88.04 (0.00) 85.24 (0.00) 73.24 (0.00) 75.20 (0.00) 72.91 (0.00)
R-squared 0.21 0.22 0.22 0.22 0.17 0.17 0.17
a
From balance sheet data (AIDA). Robust standard errors in parentheses; *significant at 10%; **significant at 5%; ***significant at 1%
277
Table 13.4 Determinants of labour productivity growth (value added per employee) between 2001 and 2003, with interaction terms
278
(1) (2) (3) (4) (5) (6)

Log value added per worker (2001) -0.337*** -0.336*** -0.335*** -0.280*** -0.278*** -0.278***
(0.028) (0.028) (0.028) (0.028) (0.028) (0.028)
Investment per worker (2001) 0.003*** 0.003*** 0.003*** 0.003*** 0.003*** 0.003***
(0.001) (0.001) (0.001) (0.001) (0.001) (0.001)
Log labour cost per worker (2001) 0.149*** 0.148*** 0.143*** 0.115*** 0.113*** 0.109***
(0.037) (0.038) (0.038) (0.036) (0.037) (0.037)
R&D/Sales (2001) -0.097 -0.164 -0.120 0.171 0.097 0.144
(0.422) (0.414) (0.427) (0.437) (0.430) (0.442)
Fixed-term share (2001)* R&D firm -0.057 -0.050 -0.010 0.007
(0.088) (0.106) (0.089) (0.108)
Fixed-term share (2001)* Non R&D firm -0.240*** -0.210*** -0.235*** -0.206**
(0.074) (0.079) (0.077) (0.084)
Labour turnover (2001)* R&D firm -0.031 -0.022 -0.027 -0.028
(0.035) (0.041) (0.035) (0.042)
Labour turnover (2001)* Non R&D firm -0.095** -0.055 -0.097** -0.056
(0.043) (0.045) (0.044) (0.046)
Growth of sectoral value added (2001–2003) 0.923*** 0.907*** 0.926***
(0.112) (0.112) (0.113)
Size: 21–50 employees 0.011 0.013 0.012 0.011 0.013 0.012
(0.016) (0.016) (0.016) (0.017) (0.017) (0.017)
Size: 51–250 employees 0.040*** 0.040** 0.040** 0.036** 0.036** 0.036**
(0.016) (0.016) (0.016) (0.016) (0.016) (0.016)
Size: 251–500 employees 0.058** 0.057* 0.057* 0.065** 0.064** 0.064**
(0.029) (0.029) (0.029) (0.029) (0.029) (0.029)
Size: more than 500 employees 0.102*** 0.103*** 0.103*** 0.108*** 0.109*** 0.108***
(reference: less than 21) (0.036) (0.037) (0.037) (0.037) (0.037) (0.037)
(continued)
F. Lucidi
13
(1) (2) (3) (4) (5) (6)

Age: 25–40 years -0.043*** -0.043*** -0.042*** -0.045*** -0.046*** -0.045***
(0.016) (0.016) (0.016) (0.016) (0.016) (0.016)
Age: more than 40 years -0.052*** -0.054*** -0.052*** -0.047*** -0.049*** -0.048**
(reference: less than 25) (0.018) (0.018) (0.018) (0.018) (0.018) (0.018)
Constant 0.856*** 0.862*** 0.875*** 0.669*** 0.670*** 0.682***
(0.101) (0.101) (0.102) (0.081) (0.081) (0.082)
Sector dummies Yes Yes Yes No No No
Regional dummies Yes Yes Yes Yes Yes Yes
Observations 2,661 2,654 2,639 2,661 2,654 2,639
F-test (p-value) 10.26 (0.00) 10.14 (0.00) 9.60 (0.00) 13.51 (0.00) 13.16 (0.00) 11.81 (0.00)
White/Koenker (p-value) 82.79 (0.00) 84.99 (0.00) 83.32 (0.00) 62.92 (0.00) 64.90 (0.00) 63.48 (0.00)
R-squared 0.19 0.19 0.19 0.14 0.14 0.14
Robust standard errors in parentheses. *significant at 10%; **significant at 5%; ***significant at 1%
279
280 F. Lucidi
13.5 Concluding Remarks and Policy Implications
The results from the previous section provide quite robust evidence for the
existence of a firm-level trade-off between external labour flexibility and labour
productivity growth. In particular, firms exhibiting a higher share of temporary
workers in their workforces and a higher rate of labour turnover achieved a slower
growth of value added per worker in the period 2001–2003. This evidence seems
to be stronger for non-R&D firms, where the use of flexible practices may be
functional to cost scrapping.
Moreover, lagged labour costs per employee (both in levels and in changes)
have a significant role in explaining labour productivity growth during the
period: a decreasing wage bill makes it economically convenient to preserve
low-productive jobs and labour-intensive productive processes, curbing incentives
for their modernization and the adoption of new technologies. From a Schumpe-
terian viewpoint, the process of ‘creative destruction’ is thus hampered: even if
positive effects may ensue in the short run (increased employment, albeit through
the creation of low-quality jobs), the long-term negative effects on economic
growth are evident.
These considerations raise some doubts concerning the sustainability of both
labour-market reforms and continued wage restraint policies in the long run. On
the one hand, revision of the 1992 and 1993 agreements on the wage-setting
institutions appears necessary in order to re-distribute productivity increases to
employees, and to take advantage (from a growth perspective) of the dual nature of
labour incomes, which represent both a stimulus to technological innovation and
the main component of aggregate demand. It is arguable, however, whether a
change of the wage-setting institutions should involve their decentralization, for
example by making firm-level agreements compulsory, or reinforcement of the
role of centralized bargaining (e.g. leaving the task of redistributing the average
sectoral increase in productivity to industry-level agreements).17 Whatever the
case may be, such policies should be tempered by increased competition in the
goods markets in order to prevent the occurrence of wage-price spirals.
On the other hand, the evidence on labour flexibility suggests that employment
protection legislation should be revised so as that temporary jobs are not less costly
to firms than permanent ones, at least in terms of social contributions. Fixed-term
contracts should be designed to help firms deal with production peaks (due to the
seasonality or cyclicality of certain activities) or as a means to screen entrants with
a view to their future inclusion in the stable workforce. Instead, recent labour
market reforms increasing flexibility ‘at the margin’ without changing the rules for
core workers have created the conditions for the persistence of workers in pre-
carious employment, without providing them with the bargaining power that they
17
According to the Schumpeterian paradigm, the second solution may be preferable in inducing
technological laggards (whose performance in terms of productivity is worse) to adopt
innovations so that they are not forced out of the market.
need to negotiate higher wages (as a risk premium to compensate for the chance of
not being hired permanently on expiry of the temporary contract). In many cases,
therefore, the use of fixed-term contracts (and, more specifically, of ‘atypical’
arrangements) provide employers with three sorts of saving: not only on firing
costs, but also on wage costs and on social contributions.18
To quote Sylos Labini, ‘‘(…) when labour market is too rigid there are troubles,
but troubles of a different kind can arise when flexibility is unlimited. Here, too,
there is a problem of achieving an optimal level’’ (Sylos Labini 1999, p. 265). The
task of finding an ‘optimal’ level of labour flexibility is still an open challenge for
policy-makers. However, the results of this analysis emphasise the need to
accelerate this process, and to evaluate (as a direction for future research) the
impact of labour market reforms not only in a short run perspective.
Appendix A: Labour Productivity Decomposition
This appendix explains the decomposition of labour productivity growth presented

in Fig. 13.1. Since labour productivity, at an aggregate level, is a weighted average
of sectoral productivity levels with weights corresponding to the employment
shares of each sector, its trend depends both on the variation of productivity in
each sector and on the variation of the sectoral composition of employment.
Therefore, productivity growth between two periods can be algebraically
decomposed into a between component, a within component, and a residual. The
first component represents the contribution to productivity growth made by the
reallocation of labour from low-productive to high-productive industries, corre-
sponding to the increased productivity that would be observed maintaining pro-
ductivity levels constant within sectors. The second identifies the growth of
productivity due merely to intra-sectoral increases, in the absence of labour
reallocation. Finally, the residual captures the interaction effects between pro-
ductivity and employment at the industry level, taking a positive sign if the
two variables are positively correlated, a negative one in the opposite case. The
formula used for the decomposition is the following:
P
n P
n
pit qit pi0 qi0
pt p0 i¼1 i¼1
¼ P
n
p0
pi0 qi0
i¼1
n
X
qit qi0 pit pi0 ðpit pi0 Þðqit qi0 Þ
¼ pi0 þ qi0 þ
i¼1
p0 p0 p0
18
On the individuals’ side, in particular for young people, this also translates into lower
expectations for future pensions.
282 F. Lucidi
Table 13.5 Decomposition of average annual labour productivity growth

1984– 1988– 1992– 1996– 2000–
1988 1992 1996 2000 2004
Structural change 1.21 0.51 0.27 0.45 0.15
Intra-industry productivity 0.92 0.69 1.63 0.61 -0.05
growth
Interaction effects -0.27 -0.13 -0.04 -0.11 -0.08
Total 1.86 1.08 1.87 0.95 0.02
Source Own computation on Istat data
Table 13.6 Descriptive statistics (full sample, 2001–2003)

Variable Mean Median Std. Dev. Min Max
Value added per worker (thousands of euros) 46.094 40.905 23.785 3.432 195.180
Growth of value added per worker (2001–2003) -0.025 -0.017 0.336 -2.444 2.772
Investment per worker (thousands of euros) 5.197 2.210 8.162 0.000 65.944
Labour cost per worker (thousands of euros) 26.403 25.341 8.535 4.267 74.022
R&D/Sales (thousands of euros) 0.006 0.000 0.016 0.000 0.134
Share of fixed-term contracts 0.032 0.000 0.098 0.000 0.944
Total labour turnover 0.143 0.095 0.197 0.000 1.875
where pt is aggregate labour productivity at time t, pit is labour productivity in

sector i at time t, and qit is the share of employed in sector i at time t. The first term
in the square brackets is the ‘structural change’ (between) effect in sector i; the
second term is the ‘productivity growth’ (within) effect in sector i; finally, the last
term is the interaction effect in sector i.
The decomposition between 1984 and 2004 (by 5-year intervals) was performed
using value added per equivalent labour unit (at constant prices) as the labour
productivity index, and sectors were selected according to the Ateco 2002
classification at 1-digit level (sections and subsections, 30 sectors). Table 13.5
summarizes the results of the analysis.
Appendix B: Variables Definitions and Descriptive

Statistics
Value added per worker: value added was calculated as the value of production
(net sales ± variation of inventories, + capitalized costs) less net consumption
(materials ± variation of inventories) and services. It was deflated using value
added deflator disaggregated at 2-digit level, and divided by the number of
workers declared by firms in the questionnaire. Firms reporting negative or zero
value added were not considered.
Investment per worker: investment in equipment and machinery as declared in

the questionnaire, deflated with the gross investment deflator at 2-digit level of
disaggregation and divided by the number of workers.
Labour cost per worker: labour costs deflated with the consumer price index
and divided by the number of workers. When considered in the interval 1998–
2000, the average number of employees during the year (taken from balance sheet
data) was considered.
R&D/Sales ratio: R&D expenditure divided by the amount of sales, both
derived from questionnaires Table 13.6.
Share of fixed term contracts: percentage of workers (both full-time and
part-time) on fixed-term arrangements.
Total labour turnover: sum of hirings and layoffs divided by the number of
workers.
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Addabbo y Solinas (2012) - Non-Standard Employment and Quality of Work, The Case of Italy

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AIEL Series in Labour Economics

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Library of Congress Control Number: 2011937432

Ó Springer-Verlag Berlin Heidelberg 2012

Printed on acid-free paper

Physica-Verlag is a brand of Springer

Part I Non-Standard Employment, Labour Supply

2 A Microeconometric Analysis of Female Labour Force

3 Balancing Work and Family: New Mothers’ Employment

4 Part-Time and Temporary Employment:

Part II Non-Standard Employment, Workers’ Mobility

5 The Quality of Temporary Work . . . . . . . . . . . . . . . . . . . . . . . . 79

6 Temporary Help Workers in Italy. Where Do They Come From

7 The Dynamics of Unemployment, Temporary

8 Labour Market Segmentation, Flexibility and Precariousness

Part III Part-Time Employment, Working Conditions

9 Quality of Work: The Case of Part-Time Work in Italy . . . . . . . 175

10 Does Part-Time Mean Part-Satisfaction? . . . . . . . . . . . . . . . . . . . 189

11 Workers’ Lifestyle Choices, Working Time

Part IV Non-Standard Employment, Quality of Work

12 Non-Standard Employment and Quality of Work:

13 Is There a Trade-Off Between Labour Flexibility

Tindara Addabbo (e-mail: tindara.addabbo@unimore.it) is Associate Professor

Giovanni Solinas (e-mail: giovanni.solinas@unimore.it) is Full Professor of

Tindara Addabbo Department of Economics, University of Modena and Reggio

Giovanni Russo CEDEFOP, Finikas, Thessaloniki, Greece, e-mail: giovanni.

Tindara Addabbo and Giovanni Solinas

T. Addabbo (&) G. Solinas (&)

T. Addabbo and G. Solinas (eds.), Non-Standard Employment and Quality of Work, 1

the overall fall in employment may be attributed to fixed-term contracts and

1.1 Non-Standard Employment, Labour Supply

1.2 Non-Standard Employment, Workers’ Mobility

of the family) explain an important part of the transition towards unemployment

looked upon as a permanent condition. In other words, Tattara and Valentini’s

1.3 Part-Time Employment, Working Conditions

inadequacy of company systems with regard to evaluating performance. Opting for

1.4 Non-Standard Employment, Quality of Work

The spread of the various forms of non-standard employment, in an age of rapid

incentive to adopt new labour-saving technologies as well as the incentive (also

1.5 A Provisional Conclusion

for temporary work: in certain conditions temporary labour may be transformed

Massimiliano Bratti and Stefano Staffolani

T. Addabbo and G. Solinas (eds.), Non-Standard Employment and Quality of Work, 25

2.2 A Brief Overview of the Empirical Literature

2.3 Data Description

Table 2.1 Means of territorial variables, by macro-areas

In our sample, 84.7% of women have a partner; 60.6% have compulsory

2.4 Econometric Issues

If we further assume that /ðxi Þ ¼ expðx0i bÞ and that ei is log-normally distrib-

In what follows, we will describe the results by considering different types of

Table 2.2 Ordered probit estimates of female participation: territorial characteristics

Table 2.3 Ordered probit estimates of female participation

• partner’s characteristics (Table 2.5), including job qualification, age by classes

Table 2.4 Ordered probit estimates of female participation

Table 2.5 Ordered probit estimates of female participation

The marginal effects of the territorial variables on the probability of PT par-

2.6 Concluding Remarks

influences. PT employment opportunities at local level appear to increase female

Andrea Neri, Martina Lo Conte and Piero Casadio

A. Neri (&) P. Casadio

T. Addabbo and G. Solinas (eds.), Non-Standard Employment and Quality of Work, 39

3.2 The Main Determinants of Mothers’ Working Status

The presence of children seems broadly to influence female employment patterns