The focus of this paper is to analyse the wage effects of temporary jobs using the 2000 and 2002 waves of the Survey of Italian HouseholdsÕ Income and Wealth (SHIW). Exploiting the short longitudinal dimension of the survey and taking into account of individual-and job-specific unobservable components result in an estimated wage penalty for temporary workers of around 12-13%. Furthermore, there is evidence of higher wage returns to seniority for temporary workers, generating a reduction in the wage gap by about 2.3 percentage points after one year of tenure.
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