Labour share and employment protection in European economies
AbstractLiberalisation of temporary contracts has become an important component of recent labour reforms but up to now available research has not paid attention to the impacts of these institutional changes on functional income distribution. The present paper intends to fill this gap by focussing on the reduction in strictness of employment protection of temporary jobs and analysing its effects on factor shares. We have estimated labour share, as well as its components, worker pays and employment, by considering country-sector evidence for 14 EU economies and the sample period 1995-2007. We have found that these legislative changes, that have favoured the extensive use of temporary contracts, have contributed to instability of working conditions and caused negative effects on workers’ pays. These impacts have more than counterbalanced the scanty positive effects on employment (due to greater access to the labour market of additional workers, likely young and women), thus leading to a decrease in income share accruing to workers.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 43058.
Date of creation: 03 Dec 2012
Date of revision:
factor income distribution; labour regulation;
Other versions of this item:
- Mirella Damiani & Fabrizio Pompei & Andrea Ricci, 2012. "Labour Shares and Employment Protection in European Economies," Quaderni del Dipartimento di Economia, Finanza e Statistica 111/2012, Università di Perugia, Dipartimento Economia, Finanza e Statistica.
- E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
- J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
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