Does Employment Protection Help Immigrants? Evidence from European Labor Markets
AbstractHigh levels of employment protection reduce hiring and firing and have a theoretically ambiguous effect on the employment level. Immigrants, being new to the labor market, may be less aware of employment protection regulations and less likely to claim their rights, which may create a gap between the costs for employers of hiring a native relative to hiring an immigrant. This paper tests that hypothesis drawing on evidence for the EU and on two natural experiments for Spain and Italy. The results suggest that strict employment protection legislation (EPL) gives immigrants a comparative advantage relative to natives. Stricter EPL is found to reduce employment and reduce hiring and firing rates for natives. By contrast, stricter EPL has no effect on most immigrants and may even increase employment rates for those who have been in the country for a longer time.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3414.
Length: 45 pages
Date of creation: Mar 2008
Date of revision:
Publication status: published in: Labour Economics, 2011, 18 (5), 624-642
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Other versions of this item:
- Sá, Filipa, 2011. "Does employment protection help immigrants? Evidence from European labor markets," Labour Economics, Elsevier, vol. 18(5), pages 624-642, October.
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-04 (All new papers)
- NEP-EEC-2008-04-04 (European Economics)
- NEP-LAB-2008-04-04 (Labour Economics)
- NEP-LTV-2008-04-04 (Unemployment, Inequality & Poverty)
- NEP-MIG-2008-04-04 (Economics of Human Migration)
- NEP-REG-2008-04-04 (Regulation)
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