Within-firm inequality in workdays and labor productivity: evidence from linked employer–employee Italian data

Abstract Using a longitudinal dataset built merging survey and administrative datasets on Italian firms, we investigate the association between productivity growth and labor flexibility focusing on the role of inequality of yearly workdays within firms. In addition to a negative association between productivity growth and the share of fixed-term employment, we find a further negative association between this type of within-firm inequality and labor productivity growth. This finding suggests that higher inequality in workdays may weaken cooperation among workers, affecting productivity.