No. 707 - Temporary contracts: an analysis of the North-South gap in Italy

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by Silvia Camussi, Fabrizio Colonna and Francesca ModenaJuly 2022

In Italy the share of temporary employment in the non-farm private sector is significantly higher in the South. Our analysis aims to investigate the determinants of the gap between the two macro-regions of the Centre and North, and the South: after assessing how much can be explained by the composition of both labour demand and supply, we focus on the role played by job creation and job destruction dynamics. In particular, we study the differences between the two areas in hiring strategies and in the evolution and duration of employment contracts.

More than half of the Centre North-South gap in the use of temporary contracts is explained by the differences in sectoral and occupational composition. A large part is associated with differences in the age profile of temporary workers. According to flow data, the larger share of fixed-term contracts in the South reflects the lower probability that they will eventually be converted into permanent ones and the shorter duration of permanent positions.

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