EconPapers    
Economics at your fingertips  
 

The labour market effects of financial crises: The role of temporary contracts in Central and Western Europe

Siddharth Sharma and Hernan Winkler

The Economics of Transition, 2018, vol. 26, issue 1, 35-60

Abstract: This paper examines how the 2008–2009 financial crisis affected labour markets in Europe, and how this impact depended on employment protection laws. Using a difference†in†differences approach, our estimates isolate the effect of the lack of credit on the labour market from that of the general decline in aggregate economic activity. We find large and negative impacts of the credit shock on total employment, particularly on temporary, unskilled and young workers. These impacts were significantly larger in countries with stronger legal protection of permanent workers from dismissal. This suggests that the differential impact of the crisis across countries was not entirely driven by the heterogeneity of the credit shock, but also by labour regulations. Given regulatory inflexibility in adjusting the permanent workforce, firms responded to tightening financial constraints by disproportionately laying off temporary workers (who tend to be younger and less skilled than permanent workers).

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/ecot.12141

Related works:
Working Paper: The labor market effects of financial crises: the role of temporary contracts in central and western Europe (2017) Downloads
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:bla:etrans:v:26:y:2018:i:1:p:35-60

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0967-0750

Access Statistics for this article

The Economics of Transition is currently edited by Philippe Aghion and Wendy Carlin

More articles in The Economics of Transition from The European Bank for Reconstruction and Development Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2019-03-23
Handle: RePEc:bla:etrans:v:26:y:2018:i:1:p:35-60