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How much does others’ protection matter? Employment protection, future labour market prospects and well-being

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  • Christine Luecke
  • Andreas Knabe

Abstract

Employment protection legislation (EPL) is an important determinant of workers’ perceived labour market prospects and also their subjective well-being. Recent studies indicate that it is not only a worker’s own level of protection that matters for individual prospects and well-being, but also that of others. We examine how such cross-effects on well-being are mediated by workers’ perceived risk of job loss and future employability. We apply a structural model to data from the European Quality of Life Survey and the OECD Employment Protection Database. Our results indicate that both permanent and fixed-term workers’ perceived employability is affected by EPL, positively for fixed-term workers and negatively for permanent workers. Stricter protection for permanent workers is positively related to fixed-term workers’ perceived risk of job loss. EPL has significant indirect (cross-)effects on life satisfaction via the mediators. There are no indications for direct, non-mediated effects.

Suggested Citation

  • Christine Luecke & Andreas Knabe, 2020. "How much does others’ protection matter? Employment protection, future labour market prospects and well-being," Oxford Economic Papers, Oxford University Press, vol. 72(3), pages 893-914.
    • Handle: RePEc:oup:oxecpp:v:72:y:2020:i:3:p:893-914.
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    File URL: http://hdl.handle.net/10.1093/oep/gpz050
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    Cited by:

    1. Hetschko, Clemens & Knabe, Andreas & Schöb, Ronnie, 2021. "Happiness, Work, and Identity," GLO Discussion Paper Series 783, Global Labor Organization (GLO).

    More about this item

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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