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Job protection legislation and productivity growth in OECD countries

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Author Info
Andrea Bassanini
Luca Nunziata
Danielle Venn

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Abstract

"We examine the effect of dismissal regulation on productivity in the OECD, using annual cross-country aggregate data on the stringency of employment protection legislation and industry-level data on productivity from 1982 to 2003. Our empirical results suggest that mandatory dismissal regulations have a depressing impact on productivity growth in industries where layoff restrictions are more likely to be binding. By contrast, we find no evidence of a productivity effect of regulations concerning temporary contracts, which suggests that partial reforms, facilitating the use of fixed-term and atypical contracts, are unlikely to have an important impact on efficiency and technological change and cannot therefore be a substitute for comprehensive reforms whereby dismissal restrictions for open-ended contracts are also weakened." Copyright (c) CEPR, CES, MSH, 2009.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0327.2009.00221.x
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Publisher Info
Article provided by CEPR, CES, MSH in its journal Economic Policy.

Volume (Year): 24 (2009)
Issue (Month): (04)
Pages: 349-402
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Handle: RePEc:bla:ecpoli:v:24:y:2009:i::p:349-402

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References listed on IDEAS
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Dolado, Juan José & Stucchi, Rodolfo, 2008. "Do Temporary Contracts Affect TFP? Evidence from Spanish Manufacturing Firms," IZA Discussion Papers 3832, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Damiani, Mirella & Pompei, Fabrizio, 2009. "Labour protection and productivity in the European economies: 1995-2005," MPRA Paper 12710, University Library of Munich, Germany. [Downloadable!]
  3. Andrea Bassanini & Danielle Venn, 2008. "The Impact of Labour Market Policies on Productivity in OECD Countries," International Productivity Monitor, Centre for the Study of Living Standards, vol. 17, pages 3-15, Fall. [Downloadable!]
  4. Böckerman, Petri & Ilmakunnas, Pekka & Johansson , Edvard, 2009. "Creative destruction and employee well-being," MPRA Paper 15447, University Library of Munich, Germany. [Downloadable!]
  5. Cecilia García-Peñalosa, 2008. "Inequality and growth: Goal conflict or necessary prerequisite?," Working Papers 147, Oesterreichische Nationalbank (Austrian Central Bank). [Downloadable!]
  6. Grassi, Emanuele, 2009. "EPL and Job Contract Conversion Rate: The Italian CFL Case," MPRA Paper 12679, University Library of Munich, Germany. [Downloadable!]
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