Do Employment Protection Reforms Affect Well-Being?

Vanessa Dräger ()
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Vanessa Dräger: University of Cologne

No 9114, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper examines reforms in German employment protection for permanent workers (EPLP) on workers' well-being proxied by life satisfaction. Using variation in how the reforms affected firms of different sizes, I apply a difference-in-differences approach in conjunction with individual fixed effects. I find that life satisfaction of temporary workers decreases by around 0.5 (11-point scale) when EPLP decreases. I investigate effect heterogeneity and discuss mechanisms. Placebo tests are conducted. An increase in EPLP had no effect. Due to the design of the EPLP reforms, the majority of permanent workers did not face major changes in EPLP.

Keywords: life satisfaction; well-being; employment protection reforms; quasi-experiment; difference-in-difference (search for similar items in EconPapers)
JEL-codes: J32 J38 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2015-06
New Economics Papers: this item is included in nep-eur, nep-hap and nep-lma
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Citations: View citations in EconPapers (1)

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