Exuberant Proclivity Towards Non-Standard Employment: Evidence from Linked Employer-Employee Data

The Institute of Economics will hold one meeting of its Seminar Series on Wednesday, November 6, 2019: Fabio Landini, from the University of Parma, will present the paper "Exuberant Proclivity Towards Non-Standard Employment: Evidence from Linked Employer-Employee Data".

Abstract:

Non-standard forms of employment (NSFE) are a pervasive feature of the labor market. However, the firm-level diffusion of NSFE is less uniform than expected: while some firms exhibit high propensity to use NSFE, others make no use of it. Most conventional explanations of NSFE use (market uncertainty, production regimes, competitive pressure) fail to account for such heterogeneity. In this article the authors develop an alternative explanation linking the use of NSFE to firm-specific availability of managerial resources: whenever the latter are relatively scarce, firms make larger use of NSFE to reduce coordination and operating costs. Using a linked employer-employee panel of manufacturing firms from the Emilia-Romagna region (Italy), the authors provide empirical support for this hypothesis. Results are robust to different estimation strategies and controlling for alternative drivers of NSFE use. The use of NSFE has strong managerial roots: it allows firms to compensate for firm-specific managerial weaknesses.