The Effects of Employmet Protection on Labor Turnover: Empirical Empirical Evidence from Taiwan

Kamhon Kan () and Yen-Ling Lin
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Yen-Ling Lin: Department of Economics, Tamkang University

No 09-A005, IEAS Working Paper : academic research from Institute of Economics, Academia Sinica, Taipei, Taiwan

Abstract: This paper investigates the effects of employment protection legislation on the rates of hiring, separation, worker flows, job reallocation, and churning flows for the case of Taiwan. Our empirical identification takes advantage of a reform created by Taiwan’s enactment of Labor Standards Law, which has substantially increased the costs of firing, and the implementation of the law’s enforcement measures. Moreover, our identification also exploits the fact that the stringency of the law’s provisions and the intensity of the law’s enforcement vary with establishment size. Based on monthly data at the establishment level for the period 1983–1995, we find that Taiwan’s Labor Standards Law and its enforcement measures have dampened labor turnover for mediumsized and large establishments, while that of small establishments was not affected.

Keywords: Employment protection; Hiring; Separation; Worker flows; Job reallocation; Churning flows; Labor Standards Law (search for similar items in EconPapers)
JEL-codes: J63 J65 J88 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2009-05
New Economics Papers: this item is included in nep-lab and nep-reg
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