Working Paper: CEPR ID: DP5736
Authors: Andrea Ichino; Fabrizia Mealli; Tommaso Nannicini
Abstract: The diffusion of Temporary Work Agency (TWA) jobs originated a harsh policy debate and ambiguous empirical evidence. Results for the US, based on quasi-experimental evidence, suggest that a TWA assignment decreases the probability of finding a stable job, while results for Europe, based on the Conditional Independence Assumption (CIA), typically reach opposite conclusions. Using data for two Italian regions, we use a matching estimator to show that TWA assignments can be an effective springboard to permanent employment. We also propose a simulation-based sensitivity analysis, which highlights that only for one of these two regions our results are robust to specific failures of the CIA. We conclude that European studies based on the CIA should not be automatically discarded, but should be put under the scrutiny of a sensitivity analysis like the one we propose.
Keywords: matching estimators; temporary work agencies
JEL Codes: C2; C8; J6
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| TWA assignments (Y20) | probability of securing permanent employment (J68) |
| TWA assignments (Y20) | probability of finding permanent employment in Tuscany (J69) |
| TWA assignments (Y20) | probability of finding permanent employment in Sicily (J69) |
| CIA holds (F53) | robustness of estimates (C51) |
| sensitivity analysis (O22) | reliability of estimates (C51) |