Temporary Workers in Italy: Who Are They and Where They End Up Gianna Barbieri — Paolo Sestito Abstract. Temporary work has been an important component of employment growth in Italy since the early 1990s. This paper focus upon labour market tran- sitions of temporary workers in order to test whether temporary work enhances the subsequent labour market chances. We use propensity score matching to compare subsequent employment outcomes of people who have recently acquired a tempo- rary job with those of people who remained unemployed. Individuals’ hetero- geneity explains a good amount of the raw differences in the subsequent labour market status of temporary workers and the comparison group. Yet there appears to be a sizable net gain from experiencing a temporary work. Our benchmark average estimate is a 30 percentage points rise in the ‘satisfactory employment’ chances 1 year after the start of the temporary work experience. The net gains are the largest for females and adult people and the areas with low unemployment; moreover, gains are the largest for the most recent years in our sample and for those people who were (according to the propensity score estimates) either least or most likely to exit from unemployment. 1. Introduction Temporary work has been an important component of employ- ment growth in Italy since the early 1990s. At the end of 1992, 7.1 per cent of the employees were on temporary contracts (temps hereafter). By the end of 2003 this share had risen to 10.3 per cent. 1 This is not surprising as Italy substantially removed the obstacles to the use of temps, while maintaining the rather strict firing Gianna Barbieri (author for correspondence) — Paolo Sestito, Ministry of Education, Statistical Unit, Via Michele Carcani, 61-00153 Roma, Italy. E-mail: gianna.barbieri@istruzione.it. We benefited from comments by Franco Peracchi, Federica Origo, and partici- pants to the AIEL (Associazione Italiana Economisti del Lavoro) September 2004 Conference held in Modena (Italy). An anonymous referee has also much contrib- uted to clarify our exposition. Yet the opinions here expressed involve only the Authors and not necessarily the Institutions they belong to. LABOUR 22 (1) 127–166 (2008) JEL J60, J64, C14 © 2008 The Authors Journal compilation © 2008 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd., 9600 Garsington Rd., Oxford OX4 2DQ, UK and Main St., Malden, MA 02148, USA.