Employment protection legislation and job stability: an European cross country analysis
AbstractThis paper tries to shed some light on the actual changes that occurred in the labour markets dynamics of the European Union 253 (EU-25) over the last decade using job tenure4 data. It then investigates the potential role of employment protection legislation (EPL)5 changes in explaining differences in the dynamics of job stability across countries but also across age groups in light of the dual-track reform strategy introduced in Europe during the same period: in most European countries, reforms were made typically at the margin (for new hires), while EPL for the incumbent workers remained unchanged. Thus, if the legislation does not apply uniformly to all workers, the effects of EPL reforms are expected to be disproportionately felt by new entrants, such as the young, women, and possibly immigrants. The paper opens with a descriptive analysis of job stability measured through job tenure in the EU-25, and its evolution over the last years. The level and structure by age of this indicator is our main empirical material. Data used comes from Labour Force Surveys (EUROSTAT) up to 2006. The analysis shows no generalized decrease in job tenure but a trend towards shorter tenure of young workers (15-24) in most European countries. In a second step, the paper examines the possible explanations behind this trend, focusing on employment protection legislation. An econometric analysis is conducted to test the existence of a link between employment protection and job stability. In particular, we look at the impact of employment protection on average tenure and on the incidence of temporary employment. Finally, some policy recommendations are provided.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Economics Division, School of Social Sciences, University of Southampton in its series Discussion Paper Series In Economics And Econometrics with number 0902.
Date of creation: 01 Feb 2009
Date of revision:
Other versions of this item:
- Sandrine CAZES & Mirco TONIN, 2010. "Employment protection legislation and job stability: A European cross-country analysis," International Labour Review, International Labour Organization, vol. 149(3), pages 261-285, 09.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Giuseppe Bertola, 1991.
"Labor Turnover Costs and Average Labor Demand,"
NBER Working Papers
3866, National Bureau of Economic Research, Inc.
- Olivier Blanchard & Augustin Landier, 2001. "The Perverse Effects of Partial Labor Market Reform: Fixed Duration Contracts in France," NBER Working Papers 8219, National Bureau of Economic Research, Inc.
- Boeri, Tito, 1996. "Is Job Turnover Countercyclical?," Journal of Labor Economics, University of Chicago Press, vol. 14(4), pages 603-25, October.
- Daniel S. Hamermesh, 1988.
"Labor Demand and the Structure of Adjustment Costs,"
NBER Working Papers
2572, National Bureau of Economic Research, Inc.
- Hamermesh, Daniel S, 1989. "Labor Demand and the Structure of Adjustment Costs," American Economic Review, American Economic Association, vol. 79(4), pages 674-89, September.
- Lawrence M. Kahn, 2006.
"The Impact of Employment Protection Mandates on Demographic Temporary Employment Patterns: International Microeconomic Evidence,"
886, Princeton University, Department of Economics, Industrial Relations Section..
- Lawrence M. Kahn, 2007. "The Impact of Employment Protection Mandates on Demographic Temporary Employment Patterns: International Microeconomic Evidence," Economic Journal, Royal Economic Society, vol. 117(521), pages 333-356, 06.
- Kahn, Lawrence M., 2005. "The Impact of Employment Protection Mandates on Demographic Temporary Employment Patterns: International Microeconomic Evidence," IZA Discussion Papers 1548, Institute for the Study of Labor (IZA).
- Tito Boeri & Pietro Garibaldi, 2007.
"Two Tier Reforms of Employment Protection: A Honeymoon Effect?,"
Carlo Alberto Notebooks
37, Collegio Carlo Alberto.
- Tito Boeri & Pietro Garibaldi, 2007. "Two Tier Reforms of Employment Protection: a Honeymoon Effect?," Economic Journal, Royal Economic Society, vol. 117(521), pages 357-385, 06.
- Bentolila, Samuel & Bertola, Giuseppe, 1990. "Firing Costs and Labour Demand: How Bad Is Eurosclerosis?," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 381-402, July.
- Cahuc, Pierre & Postel-Vinay, Fabien, 2002.
"Temporary jobs, employment protection and labor market performance,"
Elsevier, vol. 9(1), pages 63-91, February.
- Cahuc, Pierre & Postel-Vinay, Fabien, 2001. "Temporary Jobs, Employment Protection and Labor Market Performance," IZA Discussion Papers 260, Institute for the Study of Labor (IZA).
- Bentolila, Samuel & Saint-Paul, Gilles, 1992. "The macroeconomic impact of flexible labor contracts, with an application to Spain," European Economic Review, Elsevier, vol. 36(5), pages 1013-1047, June.
- Juan J Dolado & Carlos Garcia--Serrano & Juan F. Jimeno, 2002.
"Drawing Lessons From The Boom Of Temporary Jobs In Spain,"
Royal Economic Society, vol. 112(721), pages F270-F295, June.
- Dolado, Juan J. & Garcia-Serrano, Carlos & Jimeno, Juan Francisco, 2001. "Drawing Lessons From the Boom of Temporary Jobs in Spain," CEPR Discussion Papers 2884, C.E.P.R. Discussion Papers.
- Pedro Portugal & Olivier Blanchard, 2001. "What Hides Behind an Unemployment Rate: Comparing Portuguese and U.S. Labor Markets," American Economic Review, American Economic Association, vol. 91(1), pages 187-207, March.
- Cazes, Sandrine & Verick, Sher, 2010. "What role for labour market policies and institutions in development? : enhancing security in developing countries and emerging economies," ILO Working Papers 460940, International Labour Organization.
- International Labour Office, 2012. "Global employment trends for youth : 2012," Global Employment Trends Reports 480201, International Labour Office, Economic and Labour Market Analysis Department.
- Bertranou, Fabio & Casanova, Luis & Jiménez, Maribel & Jiménez, Mónica, 2013. "Informalidad, calidad del empleo y segmentación laboral en Argentina," ILO Working Papers 484591, International Labour Organization.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Thorn).
If references are entirely missing, you can add them using this form.