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• W18821457 abstract "Various theories suggest the existence of a negative relationship between external labour flexibility and productivity growth, arguing that firms' utilisation of flexible arrangements may reduce the incentives to innovation and internal training, and decrease workplace cooperation. This paper aims at providing new evidence on the occurrence of these effects in Italy, where the changes in labour legislation in the last fifteen years (alongside with an 'institutional' wage moderation period) have been accompanied by a considerable job creation process, but also by a significant labour productivity slowdown. The paper explores these aspects by using microdata from a unique firm-level database provided courtesy of ISFOL (the Italian Institute for Vocational Training). The ISFOL RIL ( Rilevazione su Imprese e Lavoro ) survey refers to the universe of firms operating in the non-agricultural private sector in 2005, and provides very detailed information about firms' utilisation of labour. In order to link the information concerning labour forces to indicators of firm performance, assets and labour costs, a sub-sample of the RIL dataset has been merged with balance sheet data coming from the Bureau Van Dijk AIDA archive, available for a nine- years period (1997-2005). As a consequence, a final sample of around 5,000 firms presenting longitudinal data on value added, labour productivity, labour costs and fixed capital, and cross-sectional data on firms' composition of the labour force by contractual arrangements, has been used. In order to estimate the effect of fixed-term contracts on labour productivity growth, a two-step approach has been adopted. Namely, in the first stage we estimated an equation for labour productivity growth by applying both the within estimator and the Arellano and Bover (1995) system-GMM estimator (in order to control for the potential endogeneity of right-hand side variables). Subsequently, the individual effects estimated in the first stage have been regressed on cross-sectional information concerning the utilisation of fixed-term contracts, free-lance workers and temporary help workers. The results of second-stage estimation pointed at a negative correlation between the utilisation of fixed- term contracts and labour productivity growth at firm level, providing some evidence for the hypothesis that labour market deregulation curbed, to a certain extent, the incentives of employers to innovate. These considerations raise some doubts concerning the sustainability of recent labour market reforms in the long run." @default.
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• W18821457 date "2008-01-01" @default.
• W18821457 modified "2023-09-27" @default.
• W18821457 title "Labour market flexibility and productivity growth: new evidence from firm-level data" @default.
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