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Employment Consequences of Employment Protection Legislation

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Author Info

  • Skedinger, Per

    ()
    (Research Institute of Industrial Economics (IFN))

Abstract

This article surveys the literature and adds to the evidence on the impact of employment protection legislation on employment. While stringent employment protection contributes to less turnover and job reallocation, the effects on aggregate employment and unemployment over the business cycle are more uncertain. Exploitation of partial reforms and the use of micro data in recent research appear not to have affected results regarding employment and unemployment in any systematic way. Labour market prospects of young people and other marginal groups seem to worsen as a consequence of increased stringency of the legislation. It is debatable whether marginal groups have gained much from the widespread policy strategy to liberalize regulations of temporary employment and leave regulations of regular employment intact. My own analysis suggests that increased stringency of regulations for regular work is associated with a higher incidence of involuntary temporary employment, particularly among the young.

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File URL: http://www.ifn.se/Wfiles/wp/wp865.pdf
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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 865.

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Length: 40 pages
Date of creation: 14 Mar 2011
Date of revision:
Publication status: Forthcoming as Skedinger, Per, 'Employment Consequences of Employment Protection Legislation' in Nordic Economic Policy Review, 2011.
Handle: RePEc:hhs:iuiwop:0865

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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
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Related research

Keywords: Job security; Employment effects; Employment protection reforms;

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References

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  1. von Below, David & Thoursie, Peter, 2008. "Last in, first out? Estimating the effect of seniority rules in Sweden," Working Paper Series 2008:27, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  2. Gómez-Salvador, Ramón & Messina, Julián & Vallanti, Giovanna, 2004. "Gross job flows and institutions in Europe," Working Paper Series 0318, European Central Bank.
  3. Torben M. Andersen & Michael Svarer, 2007. "Flexicurity – labour market performance in Denmark," Economics Working Papers 2007-09, School of Economics and Management, University of Aarhus.
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Cited by:
  1. Alexander Hijzen & Leopoldo Mondauto & Stefano Scarpetta, 2013. "The Perverse Effects of Job-security Provisions on Job Security in Italy: Results from a Regression Discontinuity Design," OECD Social, Employment and Migration Working Papers 151, OECD Publishing.
  2. Sotirios Theodoropoulos, 2011. "A Wage Policy for External Balance and Employment in EMU Environment: A Theoretical Approach," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 61(3-4), pages 85-102, July - De.
  3. Bornhäll, Anders & Daunfeldt, Sven-Olov & Rudholm, Niklas, 2014. "Employment Protection Legislation and Firm Growth: Evidence from a Natural Experiment," HUI Working Papers 102, HUI Research.
  4. Federico Cingano & Marco Leonardi & Julian Messina & Giovanni Pica, 2013. "Employment Protection Legislation, Capital Investment and Access to Credit: Evidence from Italy," CSEF Working Papers 337, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  5. Heyman, Fredrik & Skedinger, Per, 2011. "Employment Protection Reform, Enforcement in Collective Agreements and Worker Flows," Working Paper Series 876, Research Institute of Industrial Economics.

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