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Does Employment Protection Reduce the Demand for Unskilled Labor?

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  • Daniel, Kirsten

    ()
    (Loyola University)

  • Siebert, W. Stanley

    ()
    (University of Birmingham)

Abstract

Perhaps it does. We propose a model in which workers with little education or in the tails of the age distribution – the inexperienced and the old – have more chance of job failure (mismatch). Recruits’ average education should then increase and the standard deviation of starting age decrease when strict employment protection raises hiring and firing costs. We test the model using annual distributions of recruits’ characteristics from a 1975-95 panel of plants in Belgium, the Netherlands, Italy, the UK and the US. The model’s predictions are supported using the Blanchard-Wolfers index of employment protection as well as our alternative index.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1290.

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Length: 29 pages
Date of creation: Sep 2004
Date of revision:
Publication status: published in: International Economic Journal, 2005, 19 (2), 197-222
Handle: RePEc:iza:izadps:dp1290

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Keywords: employment protection; labor demand; unskilled workers; firm panel data;

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References

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Employment protection effects
    by chris dillow in Stumbling and Mumbling on 2011-01-11 13:43:39
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Cited by:
  1. Siebert, W. Stanley & Peng, Fei & Maimaiti, Yasheng, 2011. "HRM Practices and Performance of Family-Run Workplaces: Evidence from the 2004 WERS," IZA Discussion Papers 5899, Institute for the Study of Labor (IZA).
  2. Fei Peng & Lili Kang, 2013. "Labor Market Institutions and Skill Premiums: An Empirical Analysis on the UK, 1972-2002," Journal of Economic Issues, M.E. Sharpe, Inc., M.E. Sharpe, Inc., vol. 47(4), pages 959-982, December.
  3. Ilmakunnas, Pekka & Ilmakunnas, Seija, 2012. "Age segregation and hiring of older employees: low mobility revisited," MPRA Paper 37655, University Library of Munich, Germany.
  4. Doowon Lee, 2006. "The Korean Economy in Transition: In Search for a New Model," Global Economic Review, Taylor & Francis Journals, Taylor & Francis Journals, vol. 35(2), pages 207-230.
  5. Siebert, W. Stanley, 2006. "Labour Market Regulation in the EU-15: Causes and Consequences – A Survey," IZA Discussion Papers 2430, Institute for the Study of Labor (IZA).
  6. Jirjahn, Uwe & Pfeifer, Christian & Tsertsvadze, Georgi, 2006. "Mikroökonomische Beschäftigungseffekte des Hamburger Modells zur Beschäftigungsförderung," IAB Discussion Paper 200625, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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