Breaking from the starting gate on the right foot: Employment effects of an investment in human capital

Abstract

In the labor market, it is essential to establish which types of contracts provide the best stepping-stone into a permanent job. A unique setting generated by Italy’s 2012 apprenticeship reform presents us with an opportunity to study this issue. We compare workers treated by this reform to similar untreated individuals around 30 years of age, which is the upper limit for this training contract in Italy. Treated workers benefited from approximately a one percentage point increase in the probability of entering an open-ended contract. At 36 months from the treatment, their advantage of remaining in the same job was about five percentage points.