Topic
Employment protection legislation
About: Employment protection legislation is a research topic. Over the lifetime, 1074 publications have been published within this topic receiving 28727 citations. The topic is also known as: EPL.
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TL;DR: This article found that the interaction between shocks and institutions is crucial to explaining both stylised facts and found that there is insufficient heterogeneity in these shocks to explain cross-country differences, while explanations focusing on labour market institutions explain current heterogeneity well.
Abstract: Two key facts about European unemployment must be explained: the rise in unemployment since the 1960s, and the heterogeneity of individual country experiences. While adverse shocks can potentially explain much of the rise in unemployment, there is insufficient heterogeneity in these shocks to explain cross-country differences. Alternatively, while explanations focusing on labour market institutions explain current heterogeneity well, many of these institutions pre-date the rise in unemployment. Based on a panel of institutions and shocks for 20 OECD nations since 1960 we find that the interaction between shocks and institutions is crucial to explaining both stylised facts.
1,625 citations
TL;DR: In this paper, a model of firms' optimal employment policies under linear adjustment costs is proposed, and it is shown that firing costs have a larger effect on firms' propensity to fire than to hire, and (slightly) increase average long run employment.
Abstract: This paper proposes a model of firms' optimal employment policies under linear adjustment costs. We find that firing costs have a larger effect on firms' propensity to fire than to hire, and (slightly) increase average long-run employment. Calibrating the model with realistic parameter values, we argue that high firing costs, slower and more uncertain growth, and lower attrition rates after the first oil shock can explain some features of employment's dynamic behaviour in the largest European countries.
1,446 citations
TL;DR: This article examined the effects of job security provisions on employment in European countries and found that the severance pay requirements reduce employment, and that new workers are less likely to be hired in a perfectly functioning market.
Abstract: European countries have enacted various job security provisions over the last 30 years. Employers are required to pay workers on separation or to give advance notice of termination. In anything less than a perfectly functioning market, there are effects of the provisions on employment. Incumbents are more likely to retain their jobs, but new workers are less likely to be hired. An examination of the European data suggests that severance pay requirements reduce employment.
1,361 citations
TL;DR: In this article, the authors present a database on indicators of product market regulations and employment protection legislation for most of the OECD countries and illustrate a methodology for aggregating these detailed indicators into summary indicators of the strictness of regulations.
Abstract: This paper presents a database on indicators of product market regulations and employment protection legislation for most of the OECD countries and illustrates a methodology for aggregating these detailed indicators into summary indicators of the strictness of regulations. The summary indicators are obtained by means of factor analysis, in which each component of the regulatory framework is weighted according to its contribution to the overall variance in the data. These indicators are used to assess the regulatory approaches across countries as well as the interrelations between various sets of regulatory provisions. While regulatory provisions can be classified and assessed from a variety of standpoints, this paper focuses exclusively on the relative friendliness of regulations to market mechanisms: there is no attempt to assess the overall quality of regulations or their aptness in achieving their stated public policy goals. The guiding principle inspiring the conception of the ...
1,000 citations
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TL;DR: In this article, the authors survey recent work in equilibrium models of labor markets characterized by search and recruitment frictions and by the need to reallocate workers across productive activities, and use the framework to study the influence of alternative labor market institutions and policies on wages and unemployment.
Abstract: This paper surveys recent work in equilibrium models of labor markets characterized by search and recruitment frictions and by the need to reallocate workers across productive activities. The duration of unemployment and jobs and wage determination are treated as endogenous outcomes of job creation and job destruction decisions made by workers and firms. The solutions studied are dynamic stochastic equilibria in the sense that time and uncertainty are explicitly modeled, expectations are rational, private gains from trade are exploited and the actions taken by all agents are mutually consistent. A number of alternative wage determination mechanisms are explored, including the frequently studied non-cooperative wage bargaining and wage posting by firms. We use the framework to study the influence of alternative labor market institutions and policies on wages and unemployment.
990 citations