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Welfare Effects of Employment Protection

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  • Belot, Michèle
  • Boone, Jan
  • van Ours, Jan C

Abstract

Employment protection is often related to costs incurred by firms when they fire a worker. The stability of the employment relationship, enhanced by employment protection, is also favourable to the productivity of the job. We analyse employment protection focusing on this trade-off between adjustment costs and productivity. We show that from a welfare point of view there is an optimal degree of employment protection.

Suggested Citation

  • Belot, Michèle & Boone, Jan & van Ours, Jan C, 2002. "Welfare Effects of Employment Protection," CEPR Discussion Papers 3396, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:3396
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    References listed on IDEAS

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    Cited by:

    1. Juan J. Dolado & Marcel Jansen & Juan F. Jimeno, 2005. "Dual employment protection legislation: a framework for analysis," Working Papers 0510, Banco de España.
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    3. Robert Vergeer & Steven Dhondt & Alfred Kleinknecht & Karolus Kraan, 2015. "Will ‘structural reforms’ of labour markets reduce productivity growth? A firm-level investigation," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 12(3), pages 300—317-3, December.
    4. H Buscher & C Dreger & R Ramos & J Surinach, 2009. "The Impact of Institutions on the Employment Performance in European Labour Markets," Economic Issues Journal Articles, Economic Issues, vol. 14(1), pages 17-34, March.
    5. Koeniger, Winfried, 2002. "Employment Protection, Product Market Competition and Growth," IZA Discussion Papers 554, Institute of Labor Economics (IZA).
    6. Paolo Naticchioni & Emiliano Rustichelli & Antonio Scialà, 2003. "Employment protection and regional worker flows in Italy: an assessment of the theoretical predictions," Working Papers - Dipartimento di Economia 1-DEISFOL, Dipartimento di Economia, Sapienza University of Rome, revised 2003.
    7. 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.
    8. Bruno Deffains & Yannick Gabuthy & Eve-Angéline Lambert, 2007. "Labor Conflicts and Inefficiency of Relationship-Specific Investments: What is the Judge's Role?," Working Papers of BETA 2007-04, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    9. Lisi, Domenico, 2013. "The impact of temporary employment and employment protection on labour productivity : evidence from an industry-level panel of EU countries," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 46(2), pages 119-144.
    10. Erol Taymaz & Sule Ozler, 2004. "Labor Market Policies and EU Accession: Problems and Prospects for Turkey," ERC Working Papers 0405, ERC - Economic Research Center, Middle East Technical University, revised Mar 2004.
    11. Robert VERGEER & Alfred KLEINKNECHT, 2014. "Do labour market reforms reduce labour productivity growth? A panel data analysis of 20 OECD countries (1960–2004)," International Labour Review, International Labour Organization, vol. 153(3), pages 365-393, September.
    12. Bukowski, Maciej & Lewandowski, Piotr & Koloch, Grzegorz & Baranowska, Anna & Magda, Iga & Szydlowski, Arkadiusz & Bober, Magda & Bieliński, Jacek & Zawistowski, Julian & Sarzalska, Malgorzata, 2008. "Employment in Poland 2007: Security on flexible labour market," MPRA Paper 14284, University Library of Munich, Germany.
    13. Lisi, Domenico, 2009. "The Impact of Temporary Employment on Labour Productivity: Evidence from an Industry-Level Panel of EU Countries," MPRA Paper 26076, University Library of Munich, Germany.
    14. Marwa Sahnoun & Chokri Abdennadher, 2018. "The assessment of active labor market policies: evidence from OECD countries," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(2), pages 257-283, August.
    15. Alfred Kleinknecht, 2017. "Supply-side labour market reforms: a neglected cause of the productivity crisis," Working Papers 0027, ASTRIL - Associazione Studi e Ricerche Interdisciplinari sul Lavoro.
    16. Dolado Juan & Jansen Marcel & Jimeno Serrano Juan, 2007. "A Positive Analysis of Targeted Employment Protection Legislation," The B.E. Journal of Macroeconomics, De Gruyter, vol. 7(1), pages 1-30, July.
    17. Andrea Bassanini & Luca Nunziata & Danielle Venn, 2009. "Job protection legislation and productivity growth in OECD countries [Appropriate growth policy: a unifying framework]," Economic Policy, CEPR;CES;MSH, vol. 24(58), pages 349-402.
    18. Alfred Kleinknecht, 2014. "Schaden Strukturreformen des Arbeitsmarkts der Innovation?," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 40(3), pages 417-428.
    19. Dughera, Stefano & Quatraro,Francesco & Ricci,Andrea & Vittori,Claudia, 2021. "For the rest of our lives: Flexibility and innovation in Italy," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 202102, University of Turin.
    20. Andrea Bassanini & Danielle Venn, 2008. "The Impact of Labour Market Policies on Productivity in OECD Countries," International Productivity Monitor, Centre for the Study of Living Standards, vol. 17, pages 3-15, Fall.
    21. Mr. H. Takizawa, 2003. "Job-Specific Investment and the Cost of Dismissal Restrictions: The Case of Portugal," IMF Working Papers 2003/075, International Monetary Fund.

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    More about this item

    Keywords

    employment protection; hold-up; human capital; reforms; welfare;
    All these keywords.

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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