Employment protection

Stefano Scarpetta

World of Labour, 2014, No 12, 12

Abstract: Laws on hiring and firing are intended to protect workers from unfair behavior by employers, to counter imperfections in financial markets that limit workers’ ability to insure themselves against job loss, and to preserve firm-specific human capital. But by imposing costs on firms’ adaptation to changes in demand and technology, employment protection legislation may reduce not only job destruction but also job creation, hindering the efficient allocation of labor and productivity growth.

Keywords: regulations on hirings and firings; employment protection legislation (EPL); labor mobility; reallocation of resources; productivity growth (search for similar items in EconPapers)
JEL-codes: J23 J53 K31 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (14)

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