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Cross-Sectors Skill Intensity, Productivity and Temporary Employment

Lisi, Domenico and Malo, Miguel (2014): Cross-Sectors Skill Intensity, Productivity and Temporary Employment.

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Abstract

In this article, we study the impact of temporary employment (TE) on productivity and, in particular, we wonder if it differs according to sectors skill intensity. Our data set is an ad-hoc industry-level panel of European countries, which allows to deal with endogeneity problems. Our main result is that TE has a negative impact on productivity, but it is more damaging in skilled sectors. While an increase of 10 percentage points of the share of TE in skilled sectors decrease labour productivity growth about 1-1.5%, in unskilled sectors the decrease would be 0.5-0.8%. This result is robust to changes in the skill intensity index and in the sample composition. We also discuss policy implications of this result for labour market regulation.

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