Is the Italian Labour market segmented?

the paper evaluates the existence of segmentation in the Italian labour market along the lines of the dual labour market theory. It shows that even workers belonging to traditionally strong groups - such as male, head of family, in the central classes of age may be confined in the secondary segment of the labour market because of rationing or other barriers to entry the primary segment. These are young individuals, with little education, serving mostly as blue-collar workers in industry, construction and retail sale sectors. For them, return to education is almost nil and wages do not increase much with experience.Segmented labour market, Wage equations, switching model

University drop-out. The case of Italy

We combine individual and aggregate-level level data on educational attainment to study the determinants of university drop-out in Italy, one of the worst performers among developed countries. Based on detailed information on a representative sample of secondary school graduates and on local university supply we first show that family and educational background are relevant determinants of continuation probability. In particular, our results show that accounting for enrollment-induced sample selection significantly enhances the estimated coefficients with respect to standard probit analysis. We then combine our estimates with data on family and educational backgrounds of secondary school graduates in comparable European countries and find that differences in endowments only explain a minor fraction of the observed cross-country gap in studentsÂ’ attainments.University drop-out, School transitions, Social mobility, Tobit estimation

Multifactor Productivity and Labour Quality in Italy, 1981-2000

We investigate how the evidence for Italy from simple growth accounting exercises is modified by more accurate measurements of inputs. We describe the dynamics of total factor productivity in the last 20 years in Italy, and review theoretical and measurement issues that complicate the picture emerging from this simple exercise. We adjust the labour input for its composition and verify its impact on estimated multifactor productivity in the whole economy. We replicate the labour-quality adjustment for the industrial sector together with corrections for hours worked and capital utilisation. We find that a sizeable part of the observed growth of total factor productivity vanishes when these adjustments are applied. They are not sufficient, however, to overturn the evidence of a productivity slowdown in the Italian economy in the second half of the 1990s.growth accounting, Solow residual, quality-adjusted labour input

Schooling and youth mortality: learning from a mass military exemption

We examine the relationship between education and mortality in a young population of Italian males. In 1981 several cohorts of young men from specific southern towns were unexpectedly exempted from compulsory military service after a major quake hit the region. Comparisons of exempt cohorts from least damaged towns on the border of the quake region with similar ones from neighbouring non-exempt towns just outside the region show that, by 1991, the cohorts exempted while still in high school display significantly higher graduation rates. The probability of dying over the decade 1991-2001 was also significantly lower. Several robustness checks confirm that the findings do not reflect omitted quake-related confounding factors, such as the ensuing compensatory interventions. Moreover, cohorts exempted soon after high school age do not display higher schooling or lower mortality rates, thus excluding that the main findings reflect direct effects of military service on subsequent mortality rather than a causal effect of schooling. We conclude that increasing the proportion of high school graduates by 1 percentage point leads to 0.1-0.2 percentage points lower mortality rates between the ages of 25 and 35.education, mortality, health, schooling, human capital

Schooling and youth mortality : learning from a mass military exemption

This paper examines the relationship between education and mortality in a young population of Italian males. In 1981 several cohorts of young men from specific southern towns were unexpectedly exempted from compulsory military service after a major quake hit the region. Comparisons of exempt cohorts from the least damaged towns on the border of the quake region with similar ones from neighbouring non-exempt towns just outside the region show that, by 1991, the cohorts exempted while still in high school display significantly higher graduation rates. The probability of dying over the decade 1991-2001 was also significantly lower. Several robustness checks confirm that the findings do not reflect omitted quake-related confounding factors, such as the ensuing compensatory interventions. Moreover, cohorts exempted soon after high school age do not display higher schooling or lower mortality rates, thus excluding that the main findings reflect direct effects of military service on subsequent mortality rather than a causal effect of schooling. The authors conclude that increasing the proportion of high school graduates by 1 percentage point leads to 0.1-0.2 percentage points lower mortality rates between the ages of 25 and 35.Population Policies,Health Monitoring&Evaluation,Labor Policies,Demographics,Education For All

Social Interactions in High School: Lessons from an Earthquake.

We provide new evidence on the impact of peer effects on the schooling decisions of teenagers. In November 1980 a major earthquake hit Southern Italy. In the aftermath, young men from certain towns were exempted from compulsory military service. We show that the exemption raised high school graduation rates of boys by more than 2 percentage points by comparing high school graduation rates of young exempt men and older not exempt men from the least damaged areas and men of the same age groups from nearby towns that were not hit by the quake. Similar comparisons show that graduation rates of young women in the affected areas rose by about 2 percentage points. Since in Italy women are not subject to drafting, we interpret these findings as evidence of social effects of the decision of teenage boys of staying longer in school on that of teenage girls. Our estimates suggest that an increase of 1 percentage point of male graduation rates raises female probability of completing high school by about 0.7-0.8 percentage points. A series of robustness checks, including comparisons across different age groups and with different definitions of the comparison areas, suggest that the rise was due to the earthquake-related exemption, rather than other factors.istruzione, interazione sociale, peer effects, servizio militare obbligatorio

The value of flexible contracts; evidence from an italian panel of industrial firms

Since the mid-1980s fixed-term contracts have been used in many European countries to reduce firing costs. As this strategy may have led to segmented labour markets, recent policy interventions have enhanced permanent jobs by cutting their labour costs. Efficient design of these policies requires knowledge of the costs associated with employment protection legislation. In this paper we evaluate these costs by measuring firmsÂ’ willingness to trade fixed-term for open-ended contracts in exchange for a cut in the labour cost of permanent jobs. Our results are based on a panel of Italian firms in the engineering sector whose labour costs were reduced by a tax credit granted to firms hiring workers on open-ended rather than fixed-term contracts. The trade-off is identified by comparing how the composition of recruitment by type of contract changed for firms that received the tax credit and those that did not. Potential distortions due to self-selection into the programme, firm-specific timevarying shocks or mechanical correlation induced by the selection rule into the programme, are accounted for by estimating the spurious effect of the tax credit in the years when it was not in force. Estimation is carried out in both a parametric and non-parametric setting that uses p-score to control for different probabilities of receiving the tax credit. We found that firms value the possibility of hiring one per cent new workers on a fixed-term contract as much as a cut in the labour cost of an open-ended worker in the range of 1.3-2.8 per cent. This result helps to explain recent employment growth in Italy, where the share of fixed-term contracts among new hires grew from 34 to 42 per cent between 1995 and 2003. Using our most conservative results, we evaluate that the labour cost reduction associated with this expansion amounted to anything between 10.4 and 22.4 per cent. Given the elasticity of employment to wages, the advent of flexibility in the Italian labour market can account for a large share, between 37 and 80 per cent, of employment growth in the private sector.tax credit, open-end contracts, fixed-term contracts, firing costs

Labour market for teachers: Demographic characteristics and allocative mechanisms

The paper considers the teachers’ labour market in Italy. The quality and motivation of teachers are certainly among the determinants of pupils’ achievement, but they are difficult to measure, so we examine the composition of the pool of teachers and their behaviour to infer information about them. We look also at the institutional features that motivate the implicit contract that drives Italian teachers' behaviour, which essentially involves low salary and correspondingly low commitment and effort. In particular we examine the mechanism that allocates teachers to schools. For each school we construct three indicators; one indicating the level of turnover, which we interpret as a source of turmoil; one that refers to the mismatch between tenured teachers and their school; and a “revealed preferences indicator” that measures the schools’ quality as evaluated by the population of tenured teachers. We measure the association at the school level of our indicators with achievement as gauged by PISA 2003. Students scores are correlated negatively to the turnover and the mismatch indicators, positively to revealed preferences.Teachers labour market, Italian educational system

Does the ILO Definition Capture All Unemployment?

The labour market status of many non-working persons is at the boundary between unemployment and inactivity. Like the unemployed, they seek and are available for work; unlike them, their last search action was not recent enough to meet the ILO definition of unemployment. In this paper we examine by non-parametric tests how the transition probabilities of these out-of-the-labour-force job seekers differ from those of the unemployed as well as the other non-participants. First, using data from the European Community Household Panel, we show that in most EU countries these job seekers constitute a distinct labour market state. Second, we rely on information only available in the Italian Labour Force Survey to derive a measure of search intensity which we use to break down the out-of-the-labour-force job seekers. On the basis of their transition probabilities, the most active are indistinguishable from the unemployed.unemployment, ILO classifications, transition probabilities

The private and social return to schooling in Italy

We estimate the private (individual) and social return to schooling in Italy and four macro regions. Our estimates take into account the effects of schooling on employment and wages as well as the key features of the Italian tax and social insurance system. We find that the individual return to schooling compares favorably to the return to financial assets (especially in the South). At the social level, the available infrastructure-capital data indicates that the return to schooling exceeds that to infrastructures in the South.Education, Regional Development, Wages, Employment probability