The Economics of Employment Protection

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The Economics of Employment Protection

Author Info

Addison, John T. () (Moore School of Business, University of South Carolina and IZA, Bonn)
Teixeira, Paulino (Faculdade de Economia, Universidade de Coimbra)

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Abstract

Empirical investigation of the labor market consequences of employment protection has mushroomed since Lazear's (1990) pioneering study. Having sketched the theoretical background, we chart the course of the modern empirical literature. We focus mainly on dismissals protection, distinguishing between the themes of employment and unemployment development and labor market dynamics proper. Our discussion of employment and unemployment largely deals with the effect of employment protection on levels of these outcome indicators. We distinguish between overall and compositional effects (e.g., by demographic group and type of contract), between developing and industrialized nations, and identify some key control variables. Our discussion of labor market dynamics focuses on the speed of adjustment issue and on gross flows. It also formalizes the link between analyses of levels and changes in variables. At all times potential offsets to the adverse effects of employment protection receive consideration.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 381.

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Length: 63 pages
Date of creation: Oct 2001
Date of revision:
Handle: RePEc:iza:izadps:dp381

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Article
- John T. Addison & Paulino Teixeira, 2003. "The Economics of Employment Protection," Journal of Labor Research, Transaction Publishers, vol. 24(1), pages 85-129, January. [Downloadable!] (restricted)

Find related papers by JEL classification:
E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings

This paper has been announced in the following NEP Reports:

NEP-ALL-2001-11-05 (All new papers)
NEP-LTV-2001-11-05 (Unemployment, Inequality & Poverty)

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