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How does employment protection legislation influence hiring and firing decisions by the smallest firms?

Ana Millán, Jose Maria Millan (), Concepción Román and André van Stel ()

Economics Letters, 2013, vol. 121, issue 3, 444-448

Abstract: This paper examines the impact of employment protection legislation (EPL) on hiring decisions by own-account workers and firing decisions by very small firms (one to four employees). Using data from the EU-15 countries, our results show that the strictness of employment protection legislation is negatively related to both these types of decisions, and hence, to labour mobility among the smallest firms. This new evidence may be useful for governments aiming to create a more enabling macro-environment for employment and productivity growth.

Keywords: Self-employment; Hiring; Firing; Employment protection legislation (search for similar items in EconPapers)
JEL-codes: D22 E02 J23 L25 L26 M51 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:121:y:2013:i:3:p:444-448

DOI: 10.1016/j.econlet.2013.09.021

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