 Employment Protection Legislation Impacts on Capital and Skills CompositionGilbert Cette, Jimmy Lopez () and Jacques Mairesse Post-Print from HAL Abstract: The article investigates the effects of Employment Protection Legislation (EPL) on capital and skills according to the intensity of international competition. Grounded on a panel data sample for 14 OECD countries and 18 industries from 1988 to 2007, and a difference-in-difference approach, we find that strengthening EPL: (i) leads to a capital-labour substitution in favour of non ICT non R&D capital to the detriment of employment, this effect being mitigated in industries highly exposed to international competition; (ii) lowers ICT capital and, even more severely, R&D capital relatively to other capital components; and (iii) works at the relative disadvantage of low-skilled workers. Strengthening EPL can therefore be an impediment to organizational and so technological change and risk taking on globalized markets. An illustrative simulation suggests that structural reforms weakening EPL could have a significant favorable impact on firms' ICT and R&D investment and on hiring low-skilled workers. Date: 2018 Published in Economie et Statistique / Economics and Statistics, 2018, 503d, pp.109-122. ⟨10.24187/ecostat.2018.503d.1960⟩ There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01981426 DOI: 10.24187/ecostat.2018.503d.1960 Access Statistics for this paper More papers in Post-Print from HAL |
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