Template-type: ReDIF-Paper 1.0
Author-Name: Berton, Fabio
Author-Email: fabio.berton@unito.it 
Author-Name: Migheli Matteo 
Author-Email: matteo.migheli@unito.it
Author-Workplace-Name: University of Turin
Author-Workplace-Homepage: http://www.est.unito.it/
Title: Estimating the marginal rate of substitution between wage and employment protection.
Abstract: Empirical evidence supports the hypothesis that workers have a strong preference for job security.
Building on this, the empirical research focused so far on the analysis of the “port-of-entry
hypothesis” – namely on testing whether temporary jobs may act as a springboard towards
standard employment relationships – underexploring the issue of what would make workers
indifferent between the two options. This is the aim of the present paper. Using a dedicated survey
on a random sample of workers from the Italian public employment service, we find that: i)
workers actually require a monetary compensation to trade a non-standard job for a standard one;
ii) moreover, they display lexicographic preferences over contracts, inasmuch as when they have to
compare an open-ended contract to a freelance contract (chosen as the epitome of precariousness
in Italy), the compensation they ask for does not depend on contract duration; on the opposite,
when they compare open-ended jobs to fixed-term jobs (where only expected duration actually
matters) the required compensation does not depend on the type of contract, but only on its
planned duration; iii) the estimated MRS between wage and contract duration is 257 more Euros
per month to accept a one-year shorter employment relationship.
Length: 32 pages
Creation-Date: 2015-07
File-URL: http://www.est.unito.it/do/home.pl/Download?doc=/allegati/wp2015dip/wp_29_2015.pdf
File-Format: Application/PDF
Handle: RePEc:uto:dipeco:201529