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How does employment protection legislation influence hiring and firing decisions by the smallest firms?

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  • Millán, Ana
  • Millán, José María
  • Román, Concepción
  • van Stel, André

Abstract

This paper examines the impact of employment protection legislation (EPL) on hiring decisions by own-account workers and firing decisions by very small firms (one to four employees). Using data from the EU-15 countries, our results show that the strictness of employment protection legislation is negatively related to both these types of decisions, and hence, to labour mobility among the smallest firms. This new evidence may be useful for governments aiming to create a more enabling macro-environment for employment and productivity growth.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 121 (2013)
Issue (Month): 3 ()
Pages: 444-448

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Handle: RePEc:eee:ecolet:v:121:y:2013:i:3:p:444-448

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Web page: http://www.elsevier.com/locate/ecolet

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Keywords: Self-employment; Hiring; Firing; Employment protection legislation;

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Cited by:
  1. Emilio Congregado & José María Millán & Concepción Román, 2014. "The emergence of new entrepreneurs in Europe," Economie Internationale, CEPII research center, issue 138, pages 28–48.
  2. Millán, José María & Congregado, Emilio & Román, Concepción, 2014. "Persistence in entrepreneurship and its implications for the European entrepreneurial promotion policy," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 83-106.

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