Employment protection: Tough to scrap or tough to get?

Björn Brügemann
Authors registered in the RePEc Author Service: Bjoern A. Bruegemann

Economic Journal, 2007, vol. 117, issue 521, 386-415

Abstract: If legislating employment protection is a protracted process subject to time delays, then firms can dismiss workers before an increase in protection is implemented. Heightened risk of dismissal before implementation makes workers in countries with flexible labour markets reluctant to support proposals for more stringent protection. In the model developed in this article, this mechanism provides a novel source of "status quo" bias which can sustain differences in employment protection across countries. While in previous work "status quo" bias arises because a constituency effect makes employment protection difficult to deregulate, here the bias arises because protection is difficult to introduce. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007.

Date: 2007
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Related works:
Working Paper: Employment Protection: Tough to Scrap or Tough to Get? (2006)
Working Paper: Employment Protection: Tough to Scrap or Tough to Get? (2006)
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