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This paper investigates how firms adjust to demand shocks when wages and employment determination are regulated. Using firm-level data for the Italian metal engineering industry for the 2009-2015 period, we estimate the elasticity of the wage bill and, separately wage and employment margins, to changes in firm?s real sales. We disentangle the effect on different wage components (base wage and wage cushion) and labour inputs (permanent or temporary employment and working hours). Results show that resilience of the wage bill to demand shocks mainly works through the adjustment of working hours (especially via short-time work), while wage and employment margins are less sensitive. Industrial relations significantly influence the firm?s adjustment process: strong unions reduce the sensitivity of employment adjustment, conversely firm-level collective agreements show higher sensitivity via the wage cushion components. We discuss the implications of rent sharing for firm?s profitability.

A growing number of firms offer compensation packages that link pay to performance. The aim is to motivate workers to be more efficient while also increasing their attachment to the company, thereby reducing turnover and absenteeism. The effects of performance-related pay on productivity depend on the scheme type and design, with individual incentives showing the largest effect. Governments often offer tax breaks and financial incentives to promote performance-related pay, though their desirability has been questioned due to large deadweight losses involved. The diffusion of remote work will increase the relevance of performance-related pay.

Supplemental material, ILRR_Pagani_Suppl_Online_Appendix for Where Women Make a Difference: Gender Quotas and Firms’ Performance in Three European Countries by Simona Comi, Mara Grasseni, Federica Origo and Laura Pagani in ILR Review

The aim of this paper is to study whether and how teaching style (i.e., traditional vs active mode) affects academic performance of young individuals in tertiary education. We focus on entrepreneurship education as an ideal subject for experimenting alternative teaching methods. Identification relies on Triple Differences (DDD) estimates based on detailed administrative data for the universe of students in a Master's program in Management and Finance in Italy over 2011-2015. We measure academic achievement through several indicators, both right after the end of the entrepreneurship course (short run) and at the end of the program (long run). Our preferred estimates show no significant effects of the teaching mode on student's achievement, both in the short and in the long run. However, further estimates reveal interesting heterogeneities across students, being active teaching more effective in the case of females and students from secondary schools with an academic track.

The effects on employment of the recent economic crisis have become evident and persistent in many OECD countries, exacerbating on the one hand the demand for more flexibility by the firms; on the other the need to ensure workers security. 'Flexicurity', an institutional frame implementing a progressive flexibility of the labor market and at the same time guaranteeing its stability, has been defined as a successful model at the EU level before the crisis. The objective of this paper is therefore to empirically assess the effect of a micro-level measure of flexicurity on workers' job satisfaction using individual-level data from the longitudinal Swiss Household Panel (SHP), related to temporary and permanent employees in Switzerland for the period 2005 to 2011. Switzerland provides a particularly appropriate market to examine the potential effects of flexicurity type arrangements due to the relatively high incidence of flexible employment contracts. To this end, the sample of workers is disaggregated into different groups according to their employment contract and their perceived job security; we therefore analyse whether workers who are heterogeneous in terms of both the type of labour contract and their perceived security do also differ with regard to life satisfaction and specific aspects of the job satisfaction. Usually satisfaction variables, given the ordinal nature of the dependent variable, are analysed using ordered probit models. Van Praag and Ferrer-i-Carbonell (2006), however, developed a procedure, called Probit (OLS) or POLS, that consists in transforming an ordinal dependent variable in a "pseudo" continuous one, and allows the application of a linear model. With longitudinal data the POLS method permits for the inclusion of individual level fixed effects. Our methodology at first estimates a linear fixed effects model, thus controlling for unobserved time-invariant characteristics, while in a second step we implement a two-stage model to control for endogeneity. We also extend our analysis and seek to identify how insecurity affects temporary workers compared to permanent workers examining the impact of regional labour market conditions: we examine the effects on relative satisfaction and perceptions of security on workers in the seven Swiss statistical regions. First results show that job stability and perceived security are not necessary associated, and that job satisfaction is relatively low, mainly when perceived job security is low. The relationship between wellbeing and job security also varies according to regional employment conditions. This indicates that the duration of the contract may be less important if the worker perceives that he is not at risk of unemployment; in this regard, from a policy point of view, a greater 'flexicurity' can be obtained either directly from employer, adopting changes in work organization, or indirectly by policy makers through an appropriate mix of active labour market policies.

The aim of this paper is to study the functioning of local labour markets considering different geographical areas (macro-areas, regions, provinces). Looking at the growing differences in the unemployment rates between the North and the South of Italy, we investigate the existence of a negative relation linking wage levels to local unemployment rates. It would seem that the traditional result, better known as "wage curve", is not supported by the Italian experience. Using an appropriate geographical disaggregation and a dynamic specification that takes into account the existence of inertia in the adjustment processes, the relation that links wage levels to local unemployment often exhibits a positive sign, and in general it is not significant. Similar results are obtained even when the analysis is restricted to particular sub-groups of the labour market or to specific regions.