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Does Employment Protection Reduce the Demand for Unskilled Labor?

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  • Daniel, Kirsten

    () (Loyola University)

  • Siebert, W. Stanley

    () (University of Birmingham)

Abstract

Perhaps it does. We propose a model in which workers with little education or in the tails of the age distribution – the inexperienced and the old – have more chance of job failure (mismatch). Recruits’ average education should then increase and the standard deviation of starting age decrease when strict employment protection raises hiring and firing costs. We test the model using annual distributions of recruits’ characteristics from a 1975-95 panel of plants in Belgium, the Netherlands, Italy, the UK and the US. The model’s predictions are supported using the Blanchard-Wolfers index of employment protection as well as our alternative index.

Suggested Citation

  • Daniel, Kirsten & Siebert, W. Stanley, 2004. "Does Employment Protection Reduce the Demand for Unskilled Labor?," IZA Discussion Papers 1290, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1290
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Employment protection effects
      by chris dillow in Stumbling and Mumbling on 2011-01-11 19:43:39

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    Cited by:

    1. Pekka Ilmakunnas & Seija Ilmakunnas, 2014. "Age segregation and hiring of older employees: low mobility revisited," International Journal of Manpower, Emerald Group Publishing, vol. 35(8), pages 1090-1115, October.
    2. Jirjahn, Uwe & Pfeifer, Christian & Tsertsvadze, Georgi, 2006. "Mikroökonomische Beschäftigungseffekte des Hamburger Modells zur Beschäftigungsförderung," IAB Discussion Paper 200625, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Fei Peng & Lili Kang, 2013. "Labor Market Institutions and Skill Premiums: An Empirical Analysis on the UK, 1972-2002," Journal of Economic Issues, Taylor & Francis Journals, vol. 47(4), pages 959-982.
    4. Siebert, W. Stanley & Peng, Fei & Maimaiti, Yasheng, 2011. "HRM Practices and Performance of Family-Run Workplaces: Evidence from the 2004 WERS," IZA Discussion Papers 5899, Institute for the Study of Labor (IZA).
    5. Selçuk GÜL, 2013. "Institutional Rigidities and Their Effects on Labor Demand in Turkey," Sosyoekonomi Journal, Sosyoekonomi Society, issue 20(20).
    6. Siebert, W. Stanley, 2006. "Labour Market Regulation in the EU-15: Causes and Consequences – A Survey," IZA Discussion Papers 2430, Institute for the Study of Labor (IZA).
    7. Per Skedinger, 2010. "Employment Protection Legislation," Books, Edward Elgar Publishing, number 13686, June.
    8. Heywood, John S. & Siebert, W. Stanley, 2009. "Understanding the Labour Market for Older Workers: A Survey," IZA Discussion Papers 4033, Institute for the Study of Labor (IZA).
    9. Doowon Lee, 2006. "The Korean Economy in Transition: In Search for a New Model," Global Economic Review, Taylor & Francis Journals, vol. 35(2), pages 207-230.
    10. repec:sgh:gosnar:y:2017:i:3:p:29-53 is not listed on IDEAS

    More about this item

    Keywords

    employment protection; labor demand; unskilled workers; firm panel data;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J83 - Labor and Demographic Economics - - Labor Standards - - - Workers' Rights

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