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Labour Market Flexibility and Employment Protection Regulation in the Baltic States

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Author Info

  • Eamets, Raul

    ()
    (University of Tartu)

  • Masso, Jaan

    ()
    (University of Tartu)

Abstract

There is increasing pressure for the flexibility of labour markets both in current EU member states and candidate countries. The paper aims to estimate the strictness of employment protection regulation, one of the most relevant aspects of labour market flexibility, and the degree of its actual enforcement, for the Baltic States. For the studies on CEE labour markets the novelty in our approach is that we use information from the applicable legislation as well as on the coverage of labour legislation and the practice of law enforcement. The analysis shows that, though overall EPL strictness is close to the average of EU countries, individual and collective dismissals are relatively heavily and temporary forms of employment relatively weakly regulated. Still, the effective flexibility is increased by larger share of less protected workers and problems with law enforcement, which may be the reason why employers’ estimates on the flexibility differ somewhat from the flexibility of formal legislation. The employment protection legislation seems not to have influenced the level of unemployment in the sample of CEE countries. However, it is possible that labour markets of Baltic States will become more rigid if the law enforcement improves, with possible adverse effects on labour market performance.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1147.

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Length: 37 pages
Date of creation: May 2004
Date of revision:
Handle: RePEc:iza:izadps:dp1147

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Keywords: labour market flexibility; employment protection legislation; Baltic States;

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References

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  1. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages C1-33, March.
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  12. Tiiu Paas & Raul Eamets & Jaan Masso & Marit Room, 2003. "Labour Market Flexibility And Migration In The Baltic States: Macro Evidences," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 16, Faculty of Economics and Business Administration, University of Tartu (Estonia).
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Citations

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Cited by:
  1. Raul Eamets, 2013. "Labour market and labour market policies during great recession: the case of Estonia," IZA Journal of European Labor Studies, Springer, vol. 2(1), pages 1-25, December.
  2. Ana Grdoviæ Gnip & Iva Tomic, 2010. "How hard does the tax bite hurt? Croatian vs. European worker," Financial Theory and Practice, Institute of Public Finance, vol. 34(2), pages 109-142.
  3. Muravyev, Alexander, 2010. "Evolution of Employment Protection Legislation in the USSR, CIS and Baltic States, 1985-2009," IZA Discussion Papers 5365, Institute for the Study of Labor (IZA).
  4. Chung, Heejung, 2006. "Flexibility, but for whom? : A new approach to examining labour market flexibility across Europe using company level data," MPRA Paper 2397, University Library of Munich, Germany, revised Mar 2007.
  5. Jaan Masso & Raul Eamets & Kaia Philips, 2004. "Where Have All The Jobs Gone? Gross Job Flows In Estonia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 28, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  6. Masso, Jaan & Staehr, Karsten, 2005. "Inflation dynamics and nominal adjustment in the Baltic States," Research in International Business and Finance, Elsevier, vol. 19(2), pages 281-303, June.
  7. Eric Manes, 2009. "Pakistan's Investment Climate : Laying the Foundation for Growth, Volume 2. Annexes," World Bank Other Operational Studies 12411, The World Bank.
  8. Anna Zasova, 2011. "Labour market institutions: an obstacle or support to Latvian labour market recovery?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 11(1), pages 5-24, July.
  9. Raul Eamets, 2004. "Labour market flows and adjustment to macroeconomic shocks in the Baltic States," Post-Communist Economies, Taylor & Francis Journals, vol. 16(1), pages 47-71.
  10. Eamets, Raul, 2013. "Labour Market and Labour Market Policies During the Great Recession: The Case of Estonia," IZA Policy Papers 60, Institute for the Study of Labor (IZA).
  11. Michal, Tvrdon, 2008. "Labour Market Institutions and Labour Market Performance in the European Union," MPRA Paper 12219, University Library of Munich, Germany.
  12. Hazans, Mihails, 2011. "What explains prevalence of informal employment in European countries : the role of labor institutions, governance, immigrants, and growth," Policy Research Working Paper Series 5917, The World Bank.
  13. Masso, Jaan & Heshmati, Almas, 2003. "The Optimality and Overuse of Labour in Estonian Manufacturing Enterprises," IZA Discussion Papers 884, Institute for the Study of Labor (IZA).
  14. H. Lehmann & A. Muravyev, 2010. "Labor market institutions and labor market performance: what can we learn from transition countries?," Working Papers 714, Dipartimento Scienze Economiche, Universita' di Bologna.
  15. Vladimir Gligorov & Anna Iara & Michael Landesmann & Robert Stehrer & Hermine Vidovic, 2008. "Western Balkan Countries: Adjustment Capacity to External Shocks, with a Focus on Labour Markets," wiiw Research Reports 352, The Vienna Institute for International Economic Studies, wiiw.
  16. Julie Chytilová & Michal Mejstøík, 2007. "European Social Models and Growth: Where are the Eastern European countries heading?," Working Papers IES 2007/24, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Aug 2007.
  17. Tiiu Paas & Marit Hinnosaar & Jaan Masso & Orsolya Szirko, 2004. "Social Protection Systems In The Baltic States," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 26, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  18. Jos Van Ommeren & Mihails Hazans, 2008. "Workers' Valuation of the Remaining Employment Contract Duration," Economica, London School of Economics and Political Science, vol. 75(297), pages 116-139, 02.
  19. Tvrdon, Michal, 2007. "Labour Market Flexibility: the Case of Visegrad Countries," MPRA Paper 12314, University Library of Munich, Germany.

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