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Analysis of employment protection legislation: a model with endogenous labour productivity


  • Lisi, Domenico


This paper analyzes the effects of the different Employment Protection Legislation on the workers choices on effort. The different EPL are modelled through an easy theoretical pattern, characterized by endogenous labour productivity. In particular, it is analyzed how the labour productivity is influenced by the incentives that the different EPL give workers. The model outcomes highlight that the recent reforms produce only a positive temporary effect on the unemployment level, as emphasized by the empirical evidence. Finally, this paper analyzes a new contractual regime in order to see if it could offer in theory a better solution in term of structural employment respect to known standard regimes.

Suggested Citation

  • Lisi, Domenico, 2008. "Analysis of employment protection legislation: a model with endogenous labour productivity," MPRA Paper 27191, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:27191

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    References listed on IDEAS

    1. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June.
    2. Samuel Bentolila & Giuseppe Bertola, 1990. "Firing Costs and Labour Demand: How Bad is Eurosclerosis?," Review of Economic Studies, Oxford University Press, vol. 57(3), pages 381-402.
    3. Tito Boeri & Pietro Garibaldi, 2007. "Two Tier Reforms of Employment Protection: a Honeymoon Effect?," Economic Journal, Royal Economic Society, vol. 117(521), pages 357-385, June.
    4. O Blanchard & A Landier, 2002. "The Perverse Effects of Partial Labour Market Reform: fixed--Term Contracts in France," Economic Journal, Royal Economic Society, vol. 112(480), pages 214-244, June.
    5. Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
    6. Garibaldi, Pietro, 2006. "Personnel Economics in Imperfect Labour Markets," OUP Catalogue, Oxford University Press, number 9780199280674.
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    Cited by:

    1. 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.
    2. 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.
    3. repec:spr:jlabrs:v:50:y:2017:i:1:d:10.1007_s12651-017-0222-8 is not listed on IDEAS
    4. Lisi, Domenico & Malo, Miguel, 2014. "Cross-Sectors Skill Intensity, Productivity and Temporary Employment," MPRA Paper 56470, University Library of Munich, Germany.

    More about this item


    Employment Protection Legislation; Effort; Contractual Benchmark.;

    JEL classification:

    • L59 - Industrial Organization - - Regulation and Industrial Policy - - - Other
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General


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