Setting It Right: Employment Protection, Labour Reallocation and Productivity
John Martin () and
Stefano Scarpetta ()
Additional contact information
Stefano Scarpetta: OECD
No 27, IZA Policy Papers from Institute of Labor Economics (IZA)
Abstract:
This paper provides a critical review of the recent empirical evidence on the links between regulations affecting the hiring and firing of workers, labour reallocation and productivity growth. It also reviews how workers affected by labour mobility fare and discusses policy options to support them. The upshot is that employment protection has a sizeable effect on labour market flows and these flows, in turn, have significant impacts on productivity growth. At the same time, the evidence also shows that while greater labour market reallocation benefits many workers through higher real wages and better careers, some displaced workers lose out via longer unemployment durations and/or lower real wages in post-displacement jobs. In this context, reforms of employment protection should be considered as part of a comprehensive package that also includes an adequate safety net for the unemployed and effective re-employment services.
Keywords: productivity; employment protection; job and worker flows (search for similar items in EconPapers)
JEL-codes: J23 J53 K31 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2011-05
New Economics Papers: this item is included in nep-hme and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)
Published - published in: De Economist, 2012, 16 (2), 89-116
Downloads: (external link)
https://docs.iza.org/pp27.pdf (application/pdf)
Related works:
Journal Article: Setting It Right: Employment Protection, Labour Reallocation and Productivity (2012) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:iza:izapps:pp27
Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Access Statistics for this paper
More papers in IZA Policy Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().