The Impact of Restricting Fixed-Term Contracts on Labor and Skill Demand

Labor Market Regulation and Firm Adjustments in Skill Demand

“…Leveraging an Italian reform that lifted constraints on the employment of temporary contracts, the authors show that after the introduction of incentives for using temporary work, firms increased the use of temporary contracts and experienced lower labor costs and higher profitability. Other papers investigated the effect of changing temporary contract regulation Grasso and Tatsiramos (2022). study the effect of the 2018 reform that tightened the regulation of temporary contracts in Italy, using data on online vacancies and find a reduction (increase) in the relative hiring of temporary (permanent) workers as well as a shift towards more skilled workers.…”