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The impact of temporary employment and employment protection on labour productivity: evidence from an industry-level panel of EU countries
[Einfluss von befristeter Beschäftigung und Kündigungsschutz auf die Arbeitsproduktivität: Evidenz aus einem branchenspezifischen Panel von EU-Ländern]

Author

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  • Domenico Lisi

    () (University of Catania)

Abstract

In recent years the availability of new industry-level data allowed to evaluate the impact of labour market policies more consistently than previous standard cross-country studies. In this paper an industry-level panel is exploited to evaluate the impact of Employment Protection Legislation (EPL) for temporary employment (TE), along with permanent employment (PE), in EU countries. Indeed, the advantage of using industry-level data is manifold. The method exploits both cross-country variation in EPL for PE and TE and variation in the relevance of EPL in different industries deriving from a particular diff-in-diff assumption. Differently from the previous literature we apply this idea of the different binding of EPL only for PE, whereas we implement a different strategy for TE which should imply a more accurate identification of the effect of the use of TE on labour productivity. The theoretical literature has not established a clear prediction on the sign of the effects, existing different convincing reasons for both directions. Thus, the results of the analysis have potentially important policy implications. Our main finding is that the use of temporary contracts has a negative, even if small in magnitude, effect on labour productivity. Furthermore, the analysis confirms that EPL for regular contracts reduce labour productivity growth more in those industries requiring a greater employment reallocation.

Suggested Citation

  • Domenico Lisi, 2013. "The impact of temporary employment and employment protection on labour productivity: evidence from an industry-level panel of EU countries [Einfluss von befristeter Beschäftigung und Kündigungsschu," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 46(2), pages 119-144, August.
  • Handle: RePEc:spr:jlabrs:v:46:y:2013:i:2:d:10.1007_s12651-013-0127-0
    DOI: 10.1007/s12651-013-0127-0
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Kristel Jacquier, 2015. "Temporary employment protection reforms and productivity: evidence from an industry-level panel of EU countries," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01169260, HAL.
    2. Maria Laura Parisi & Enrico Marelli & Olga Demidova, 2015. "Labour Productivity of Young and Adult Temporary Workers and Youth Unemployment: a Cross-country Analysis," Discussion Papers 1_2015, CRISEI, University of Naples "Parthenope", Italy.
    3. Domenico Lisi & Miguel A. Malo, 2017. "The impact of temporary employment on productivity [Auswirkungen befristeter Beschäftigung auf die Produktivität]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 50(1), pages 91-112, August.
    4. Lisi, Domenico & Malo, Miguel, 2014. "Cross-Sectors Skill Intensity, Productivity and Temporary Employment," MPRA Paper 56470, University Library of Munich, Germany.
    5. Kristel Jacquier, 2015. "Temporary employment protection reforms and productivity: evidence from an industry-level panel of EU countries," Post-Print halshs-01169260, HAL.
    6. Kristel Jacquier, 2015. "Temporary employment protection reforms and productivity: evidence from an industry-level panel of EU countries," Documents de travail du Centre d'Economie de la Sorbonne 15028, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.

    More about this item

    Keywords

    Labour productivity; Temporary employment; EPL; Difference-in-differences; IV;

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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