Employment Protection Legislation and Job Reallocation across Sectors, Firms and Workers: A Survey

Pierre Cahuc () and Marco Palladino ()
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Pierre Cahuc: ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics, CEPR - Center for Economic Policy Research
Marco Palladino: Banque de France

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Abstract: This paper provides a review of the existing literature on the effects of employment protection legislation (EPL) on job allocation across industries, firms, and workers, and its implications for innovation and economic growth. We analyze empirical studies to assess how EPL influences resource allocation, firm dynamics, and labor market segmentation. The review highlights the heterogeneous effects of EPL on different firms and workers' groups. Additionally, we discuss the channels identified in the structural literature through which EPL-induced job reallocation affects productivity, innovation, and overall growth. While existing evidence demonstrates the significant influence of EPL on all these outcomes, further quantification of these effects remains a research challenge.

Keywords: innovation; productivity; economic growth; job allocation; job protection (search for similar items in EconPapers)
Date: 2024-12-10
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-05446770v1
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Published in Stéphane Carcillo; Stefano Scarpetta. Handbook on Labour Markets in Transition: Promoting Resilience in a World in Flux, Edward Elgar Publishing, pp.212-223, 2024, 978 1 83910 694 1. ⟨10.4337/9781839106958⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-05446770

DOI: 10.4337/9781839106958

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