THE PATHWAY TO PERMANENT JOBS: A TIME EVENT ANALYSIS OF YOUNG ITALIAN WORKERS

The paper analyses the effect of fixed-term contracts on the probability of finding a permanent job in the Italian labour market. I estimate a continuous proportional hazard model with nonparametric smoothing splines for time varying continuous covariates. It will be shown that such a method excellently improves the model specification with regard to proportionality assumption. Results surprisingly suggest that the hazard rate of switching to permanent employment is higher for unskilled workers than skilled workers; while transition probability is not affected by gender differences per se, rather individual traits for females and males act differently on the baseline hazard. Results show that a period of temporary employment varying between two or three years is needed before obtaining a permanent jobs. Potential implications of the main findings are provided.