How much does others’ protection matter? Employment protection, future labour market prospects and well-being

Christine Luecke and Andreas Knabe

Oxford Economic Papers, 2020, vol. 72, issue 3, 893-914

Abstract: Employment protection legislation (EPL) is an important determinant of workers’ perceived labour market prospects and also their subjective well-being. Recent studies indicate that it is not only a worker’s own level of protection that matters for individual prospects and well-being, but also that of others. We examine how such cross-effects on well-being are mediated by workers’ perceived risk of job loss and future employability. We apply a structural model to data from the European Quality of Life Survey and the OECD Employment Protection Database. Our results indicate that both permanent and fixed-term workers’ perceived employability is affected by EPL, positively for fixed-term workers and negatively for permanent workers. Stricter protection for permanent workers is positively related to fixed-term workers’ perceived risk of job loss. EPL has significant indirect (cross-)effects on life satisfaction via the mediators. There are no indications for direct, non-mediated effects.

JEL-codes: I31 J28 J68 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Working Paper: How Much Does Others' Protection Matter? Employment Protection, Future Labour Market Prospects and Well-Being (2018)
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