Equal Job unequal pay. Fixed term contracts and wage differentials in the italian labor market

Abstract

Partial and targeted labor market deregulation as undergone in Italy during the last two decades has created a strong cohort cleavage on the labor market as regards the risks of a precarious work career. In explaining the logics underlying the different kinds of labor market deregulation, the literature stresses the alternative between labor market adjustment based on wage inequality and job insecurity. Flexible and unequal labor markets in the English-speaking countries are opposed to the continental-European ones, where wage differentiation is limited but deregulation has been «at the margins». Notwithstanding the theoretical debate, there is still relatively little empirical evidence regarding the level of inequality in wages between «contingent» and «secure» work po-sitions, especially in Italy, although, given the ongoing debate, one would expect a trade-off between job security and wage level to be operating. We use the Italian com-ponent of the 1995-2001 ECHP panel waves, the SHIW panel 2004-2006, and the new 2004-2006 IT-SILC database, to provide an exhaustive, strongly empirical based analysis of the persistence of a clear and significant wage differential between contin-gent and secure work in Italy that parallels and adds to the job insecurity dimension. As regard methods, we apply FE panel models, statistical matching and multivariate analyses. All our results confirm this specific outcome of the «deregulation at the mar-gins» of the Italian labor market.