Identifying Demand and Supply of Part‐time Jobs Using Personnel Data. An Application to Italy

The percentage of part‐time workers in Italy is very low compared with most European countries. In this paper we try to contribute to an explanation. We use data on the employees of a large Italian company operating in the service sector, and apply a particular econometric framework that allows identification of potential demand and supply. We find that demand and supply are potentially very large on average, but they are difficult to match at the individual worker/job level. The firm might observe a relevant employee’s characteristics that are positively correlated with the employee’s propensity to a part‐time job but are negatively correlated with the profitability of that employee on that job. The firm might also use the revealed willingness to switch to a part‐time job as a sign that the employee is likely to be unprofitable for the company.