Research

Abstract: This paper investigates why firms use fixed-term contracts (FTCs), providing the first empirical assessment of the relative importance of different motives. Using matched employer–employee data from Italy (2013–2017) covering firms responsible for almost 90% of temporary employment, we examine three explanations: (i) seasonal needs, captured by observable and indirect indicators; (ii) screening motives, inferred from contract duration and firm-specific factors; and (iii) buffer-stock strategies, linked to revenue volatility. We classify firms by their prevalent use of FTCs and validate the taxonomy with an unsupervised machine learning algorithm. Only 14% of firms use FTCs for seasonal needs, screening accounts for less than 30%, while about 58% employ FTCs mainly as a buffer-stock to manage workforce flexibility.

Abstract: We quantify the role of gender-specific firm wage premiums in explaining the private-sector gender gap in hourly wages using a harmonized research design across 11 matched employer-employee datasets --- ten European countries and Washington State, USA. These premiums explain the gender gap when women are less likely to work at high-paying firms (sorting) or receive lower premiums than men within the same firm (pay-setting). We find that firm wage premiums account for a substantial share of variation in gender wage gaps, ranging from 15 to 32 percent. While both mechanisms matter, sorting is the predominant driver of the firm contribution to the gender wage gap in most countries. Three patterns are broadly consistent: (1) women sorting into lower-paying firms becomes increasingly pronounced with age; (2) women are more concentrated in low-paying firms with a high share of part-time workers; and (3) pay-setting gaps are largest in high-wage firms, where women receive about 90 percent of the rents men receive from firm surplus gains.

Abstract: The Dignity Decree was a 2018 reform aimed at restricting the use of fixed-term contracts in the Italian labor market. We examine how this regulatory intervention affected firm-level employment dynamics and worker wages. We find negligible disemployment effects and a significant shift in contract composition: firms more exposed to the reform substantially reduced their use of fixed-term contracts, offsetting the decrease with an increase in permanent employment, primarily through the conversion of existing temporary jobs. We further document a sizeable decline in the post-conversion wage for workers transitioning from fixed-term to permanent contracts compared to pre-reform levels.