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Does employment protection lead to unemployment? A panel data analysis of OECD countries, 1990-2008

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  • Sarkar, Prabirjit

Abstract

This paper analysed the OECD data on employment protection for 23 OECD countries over the time span 1990-2008 on the basis of alternative dynamic panel data models and panel causality tests and examines the validity of the neo-liberal argument that strictness of employment protection hurts labour through increased long-term and youth unemployment rates. While it finds no empirical basis for this orthodox standpoint it observes that long-term unemployment dampens aggregate production which in turn aggravates unemployment problem.

Suggested Citation

  • Sarkar, Prabirjit, 2011. "Does employment protection lead to unemployment? A panel data analysis of OECD countries, 1990-2008," MPRA Paper 35547, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:35547
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    More about this item

    Keywords

    labour law; regular job protection; temporary job protection; unemployment rate; long-term unemployment; youth unemployment;
    All these keywords.

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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