Assouplissement de la législation de protection de l’emploi: plus d’attractivité ? plus de bien-être ?

Sophie Lecostey

Revue économique, 2022, vol. 73, issue 1, 115-139

Abstract: Does relaxing a country?s employment protection legislation (EPL) always increase its attractiveness and/or its social surplus? While a strict EPL reduces the production flexibility of domestic firms, it gives them a strategic advantage when these firms are oligopolistic and competing in quantities. However, this strategic advantage is weakened by the possibility of allocating the production to the different markets (allocation flexibility). The reform can then lead to paradoxical or unexpected results, such as a relocation out of the country where EPL is relaxed, a decrease in incentives for foreign firms to relocate there, or a loss of social surplus even when no relocation occurs.

Keywords: employment protection; fluctuating demand; flexibility; oligopoly; strategic behaviour; relocation (search for similar items in EconPapers)
Date: 2022
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