The Transition from Temporary to Permanent Employment: Evidence from Tuscany Lorenzo Corsini — Marco Guerrazzi Abstract. In this paper, by distinguishing between the decisions made by the workers and those made by the firms, we provide a probabilistic evaluation of the transition from temporary to permanent employment in a regional context. Speci- fically, by exploiting a multinomial nested logit strategy of estimation, we find that the transition to a permanent job is far from certain, especially for women and older workers. 1. Introduction In the last 10 years, reforms aimed at increasing flexibility have led to considerable changes in the Italian labour market. The rela- tively high unemployment rates that characterized the end of the 80s called for a modernization of labour market institutions. There- fore, new contractual categories have been introduced to allow firms a more flexible use of the workforce. An evaluation of this process may lead to different conclusions. On the one hand, we may see flexible work as a device for Lorenzo Corsini (author for correspondence) — Marco Guerrazzi, Department of Economics, University of Pisa, Via C. Ridolfi, 10, 56124 Pisa, Italy. Tel: +39 050 2216220; E-mail: lcorsini@sssup.it. We would like to thank the participants from the Economics Department Seminar held in Pisa, 23 February 2005 and the participants from the International Workshop on Spatial Econometrics and Statistics held in Rome, 25–27 May 2006 for their useful suggestions. Moreover, we are grateful to IRPET (Instituto Regio- nale per la Programmazione Economica della Toscana) for making the data avail- able. Comments from an anonymous referee substantially improved the quality of the paper. The usual disclaimers apply. LABOUR 21 (2) 303–332 (2007) JEL C25, J24, K31 © 2007 The Authors Journal compilation © 2007 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd., 9600 Garsington Rd., Oxford OX4 2DQ, UK and Main St., Malden, MA 02148, USA.