Stepping stones versus dead end jobs: Exits from temporary contracts in Italy after the 2003 reform

This paper studies labour market transitions out of temporary jobs in Italy, focussing on the period that immediately follows the last 2003 labour market reform, and immediately preceding the economic downturn of the second half of 2007. The data-set used is the 2004-2007 IT-SILC individual panel. We apply a discrete-time duration analysis and estimate a competing-risk model for assessing to what extent, and for whom, starting a temporary job after 2004 results within a twoyear span in a stepping stone to permanent employment rather than a dead end. We find that temporary contracts have a positive impact only on the transition of men to permanent employment. School leavers, workers in the South, as well as women, are instead penalized after a temporary job. For women longer spells of temporary employment are not matched by a higher probability of finding a permanent contract