“Getting out of the starting gate on the right foot: employment effects of investment in human capital”

by Agata Maida, Daniela Sonedda; CeRP WP 191/19

The technological progress and the globalisation process reshape the nature of jobs inducing a substantial drop in the incidence of permanent employment occupations. This paper estimates whether employers could be less reluctant to hire workers on a permanent basis in presence of a human capital investment which they partly finance. We find that the permanent employment rate of cohorts affected by law no. 92/2012 at the age threshold of 30 years increased by about 1% when compared to the permanent employment rate of similar untreated cohorts. This difference in discontinuity impact can be generated by the vocational apprenticeship labour contract only. After 36 months from the baseline, this positive effect persists and increases to about 5%. We interpret our results as evidence that a labour contract that invests in human capital serves as a stepping stone into permanent employment.

published May 2019