Does Job Security Hamper Employment Prospects?

Carl Magnus Bjuggren and Per Skedinger

No 1255, Working Paper Series from Research Institute of Industrial Economics

Abstract: We investigate the effect of employment protection legislation (EPL) on the propensity to hire workers from unemployment and active labor market programs (ALMPs), utilizing a reform that decreased dismissal costs for small firms only. Using administrative data from Sweden, we find that less stringent EPL increased the share of workers hired from unemployment and some ALMPs. Our results suggest that there was less screening of new hires after the reform, and that liberalization of EPL mitigates the stigma associated with unemployment and participation in ALMPs.

Keywords: Employment protection; Active labor market programs; Unemployment (search for similar items in EconPapers)
JEL-codes: H80 J60 J64 K31 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2018-12-06
New Economics Papers: this item is included in nep-lab and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1255

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