The only certainty I have is that I don’t have many certainties about this puzzle. And, in my view, it’s far more complex than many think. I’ll keep thinking about it — maybe sooner or later the data will line up.
Peace. N/N

What helps explain the intensive margin doesn’t line up with the extensive margin, and I’m not even sure either makes full sense when looking at the labor market. I could go on for another 50 tweets (sectoral employment shows strong gains in construction but also in ICT), but I’ll stop here. 19/N

All this is to say that every time new data come out and I think about the puzzle, I can never arrive at a single, coherent explanation. What helps explain the levels of the series ends up muddling the explanation of growth rates. 18/N

As an aside: labor hoarding has often been mentioned. It’s an explanation I’ve never found plausible — both because I don’t think demand is weak, and because it doesn’t make sense, in my view, given the average age of new hires, etc. So, in my opinion, hoarding isn’t part of the puzzle. 17/N

Put differently: how can we say that millions of workers switched from poorly paid, precarious jobs to more stable, better-paid ones, and at the same time claim that hourly productivity has fallen? In my humble opinion, the signal from macro data doesn’t line up with the labor market. 16/N

To the point that the share of fixed-term workers (the so-called "precari" in Italian) has fallen below pre–Poletti Decree levels. 15/N

And the reason I struggle with this is that behind the rise in hours worked per worker there has been a (remarkable!) boom in permanent, open-ended contracts. 14/N

But this is the part of the puzzle I find even harder to digest. Since 2022, hours worked per worker (i.e. the gap between the yellow and the grey line) have increased — which is also something new for Italy. 13/N