Temporary Employment, Demand Volatility and Unions: Firm-Level Evidence

Luxembourg Institute of Socio-Economic Research (LISER) Working Paper Series 2014-14

32 Pages Posted: 3 Jun 2015

See all articles by Francesco Devicienti

Francesco Devicienti

University of Turin - Collegio Carlo Alberto; University of Turin - Department of Economics and Financial Sciences G. Prato

Paolo Naticchioni

University of Rome I; University of Cassino

Andrea Ricci

ISFOL, Rome (Italy)

Multiple version iconThere are 2 versions of this paper

Date Written: December 10, 2014

Abstract

This paper investigates the effect of workplace unionization and demand volatility on firms' propensity to use temporary employment. Using Italian firm level data, we show that the impact of unionization crucially depends on the type of fixed term contracts considered and the degree of volatility. The presence of unions per se is found to increase the demand for non-training temporary contracts, while it does not affect the demand for training temporary contracts. We argue that this occurs because non-training temporary contracts are typically used as a buffer stock to cope with uncertainty, and the unions tend to encourage their use to protect insider workers. Training temporary contracts, on the other hand, do not lend themselves to this function, as they are more likely to be used as a screening device for future permanent positions. We also find that, as volatility increases, the unions become more concerned about the weakening of their bargaining power and tend to discourage the hiring of non-training temporary workers.

Keywords: unions, temporary workers, training, product demand volatility, firms

Suggested Citation

Devicienti, Francesco and Naticchioni, Paolo and Ricci, Andrea, Temporary Employment, Demand Volatility and Unions: Firm-Level Evidence (December 10, 2014). Luxembourg Institute of Socio-Economic Research (LISER) Working Paper Series 2014-14. Available at SSRN: https://ssrn.com/abstract=2608887 or http://dx.doi.org/10.2139/ssrn.2608887

Francesco Devicienti (Contact Author)

University of Turin - Collegio Carlo Alberto ( email )

via Real Collegio 30
Moncalieri, Torino 10024
Italy

University of Turin - Department of Economics and Financial Sciences G. Prato ( email )

C. so Unione Sovietica, 218 Bis
Torino, 13820-4020
Italy

Paolo Naticchioni

University of Rome I ( email )

Piazzale Aldo Moro 5
Roma, Rome 00185
Italy

University of Cassino ( email )

Cassino
Italy

Andrea Ricci

ISFOL, Rome (Italy) ( email )

No Address Available

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