Does employment protection legislation affect employment and unemployment?11We acknowledge the comments of an editor and an associate editor of the journal and three reviewers. Their suggestions and recommendations were extremely helpful in improving the article. The usual disclaimer applies

Philip Arestis, Jesus Ferreiro () and Carmen Gomez

Economic Modelling, 2023, vol. 126, issue C

Abstract: The article analyses the impact of employment protection legislation (EPL) on labour market outcomes. Despite widespread reforms that have reduced employment protection, the evidence on the effects of such reforms is inconclusive. Using data from sixteen European countries over the period 1985–2019, we analyse the impact of EPL on the dynamics of employment, employees and unemployment rates. In contrast to existing studies, we analyse both the existence of a linear relationship between EPL and labour market outcomes and the existence of a non-linear relationship, as well as interaction effects between EPL and economic growth. Our results show that employment protection does not explain the changes in employment, employees and unemployment rates. Therefore, labour reforms that have reduced employment protection by reducing dismissal costs and facilitating the use of temporary contracts have not had the presumed positive effects on employment and unemployment rates.

Keywords: Employment protection legislation; Employment; Employees; Unemployment rate (search for similar items in EconPapers)
JEL-codes: E24 J21 J41 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999323002493
Full text for ScienceDirect subscribers only

Related works:
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:eee:ecmode:v:126:y:2023:i:c:s0264999323002493

DOI: 10.1016/j.econmod.2023.106437

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().