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The effects of hiring and firing regulation on unemployment and employment: evidence based on survey data


  • Horst Feldmann


We use the results of surveys among senior business executives to measure the strictness of hiring and firing regulations. The survey data are more likely than objective indicators (used in almost all previous studies) to correctly capture the de facto strictness of these regulations and their relevance to the performance of the labour market. Using data from 19 industrial countries for the period 1992 to 2002, we find that more flexible regulations are likely to lower unemployment and to increase employment rates. While the effects on the general population appear to be modest, the effects on female, young and low-skilled workers seem to be substantial.

Suggested Citation

  • Horst Feldmann, 2009. "The effects of hiring and firing regulation on unemployment and employment: evidence based on survey data," Applied Economics, Taylor & Francis Journals, vol. 41(19), pages 2389-2401.
  • Handle: RePEc:taf:applec:v:41:y:2009:i:19:p:2389-2401
    DOI: 10.1080/00036840701736131

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    References listed on IDEAS

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    3. Doyle, Orla & Fidrmuc, Jan, 2004. "Who is in favor of enlargement? Determinants of support for EU membership in the candidate countries' referenda," ZEI Working Papers B 04-2004, University of Bonn, ZEI - Center for European Integration Studies.
    4. Frieden, Jeffry A., 1991. "Invested interests: the politics of national economic policies in a world of global finance," International Organization, Cambridge University Press, vol. 45(04), pages 425-451, September.
    5. Timothy J. Feddersen, 2004. "Rational Choice Theory and the Paradox of Not Voting," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 99-112, Winter.
    6. Eichenberg, Richard C. & Dalton, Russell J., 1993. "Europeans and the European Community: the dynamics of public support for European integration," International Organization, Cambridge University Press, vol. 47(04), pages 507-534, September.
    7. MARK FRANKLIN & MICHAEL MARSH & LAUREN McLAREN, 1994. "Uncorking the Bottle: Popular Opposition to European Unification in the Wake of Maastricht," Journal of Common Market Studies, Wiley Blackwell, vol. 32(4), pages 455-472, December.
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    1. repec:eid:wpaper:01/10 is not listed on IDEAS
    2. Horst Feldmann, 2010. "Venture Capital Availability and Labor Market Performance in Industrial Countries: Evidence Based on Survey Data," Kyklos, Wiley Blackwell, vol. 63(1), pages 23-54, February.
    3. Johanna Kemper, 2016. "Resolving the Ambiguity: A Meta-Analysis of the Effect of Employment Protection on Employment and Unemployment," KOF Working papers 16-405, KOF Swiss Economic Institute, ETH Zurich.
    4. Horst Feldmann, 2009. "The quality of the legal system and labor market performance around the world," European Journal of Law and Economics, Springer, vol. 28(1), pages 39-65, August.
    5. Duanmu, Jing-Lin, 2014. "A race to lower standards? Labor standards and location choice of outward FDI from the BRIC countries," International Business Review, Elsevier, vol. 23(3), pages 620-634.

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