Early-Career Complexity Before and After Labour-Market Deregulation in Italy: Heterogeneity by Gender and Socio-economic Status Across Cohorts

Emanuela Struffolino,Michele Raitano

doi:10.1007/s11205-020-02373-0

Abstract

Labour-market deregulation may have generated more unstable and complex employment life courses. As exposure to highly volatile early-career trajectories has long-lasting consequences for the working lives of individuals, it is especially important to consider how these processes have affected younger workers in countries like Italy. Here, deregulation ‘at the margins’ of the labour market has been characterized by a strong age divide and has exacerbated the separation between insiders and outsiders. We contrast the individualization of risk perspective with the persistent inequality hypothesis by looking at differentials by gender and socio-economic status in the degree of early-career complexity of workers who entered the labour market before and after deregulation. The use of an innovative longitudinal dataset (AD-SILC) which combines administrative records on employment episodes and survey data on individuals’ socio-economic characteristics allows this study to apply advanced methods in sequence analysis to calculate the complexity of 7-year-long early career trajectories. Complexity is measured by considering the number of transitions between employment states and the length of each episode. We find that early-career complexity increased across cohorts, especially for those more exposed to deregulation. Against the scenario of a generalized increase in labour market dualization, this non-linear dynamic especially affected medium and low-educated individuals and was particularly pronounced for women. Although our analytical strategy does not allow for a causal interpretation of mechanisms engendering the observed trends, this empirical evidence is highly relevant for the implication of changes in early career patterns across cohorts for stratification research.

Highlights

In recent decades, many European countries have sought to increase labour market flexibilization by removing labour market rigidities
The mean complexity increased across entry cohorts in a non-linear fashion for both genders: it first rose for those who entered in the early 1980s and underwent a sharp increase from the mid-1990s onwards, which is when the labour market deregulation process began
These findings suggest gender heterogeneities in how the pace at which exposure to labour-market deregulation is associated with longitudinal early-career differentiation across cohorts

Summary

Introduction

Many European countries have sought to increase labour market flexibilization by removing labour market rigidities (e.g. centralized bargaining and hiring and firing costs [OECD 1994]). The literature in economics and sociology investigates the short-term effects of labour market deregulation by exploring the ‘trap versus stepping stone effect’ of non-standard labour market arrangements (e.g. Barbieri et al 2016; Booth et al 2002; Gagliarducci 2005; Polavieja 2005) It proceeds primarily by considering the occurrence and timing of transitions between single events, i.e. from temporary to permanent contracts. Dualization is measured by adopting either a categorical or a continuous indicator of ‘outsiderness’ (i.e. risk of being in atypical employment or unemployment; Schwander and Häusermann 2013) but always refers to ‘point-in-time outcomes’ using cross-sectional analytical designs Both streams of literature have demonstrated that the ‘trap effect’ of non-standard employment arrangements and insider–outsider cleavages exist and extend to generational inequalities depending on the welfare state. Another factor in the recent decline was the introduction of stricter regulations aimed at detecting ‘false’ para-subordinate work (Raitano 2018)

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