Temporary Employment, Job Mobility and Wage Growth in Italy

This paper analyses the differential in annual wage growth between temporary and permanent workers in Italy, separately for stayers (wage growth within the same workplace) and movers (between jobs via job mobility). To this purpose, we use the 1995-2001 Italian component of the ECHP (European Community Household Panel). Given the potential endogeneity of the contract type on wage dynamics, our estimates are based on a fixed effects specification. The results for the movers indicate that wage growth of temporary workers is lower than that of permanent mployees; by converse, the two groups share similar rates of on-the-job wage growth, i.e. growth among the stayers. The results also show that both the duration of the temporary contract and the age of the worker matter: the wage growth is lower among young employees with temporary contracts, especially if they change workplace in the year of observation.