Contours of Employment Protection Reform

Employment Protection Reform, Enforcement in Collective Agreements and Worker Flows

Differential enforcement of employment protection by explicit design of the legislation, for example through exemptions for small firms, has been exploited in a growing body of research. However, little is known about the effects of differential enforcement that is not defined by the letter of the law, presumably due to the lack of data. Our study incorporates aspects of both types of different...

Assessing the Political Viability of Labor Market Reform. The Case of Employment Protection

T here is somewhat of a consensus among economists that labor market rigidities are responsible for high unemployment in Europe, and in particular for its most alarming aspects such as its long duration and high incidence on youth. Unemployment benefits lower the incentive for job search and increase wage pressure by insiders. Minimum wages price the least skilled out of the market. Firing cost...

Assessing the political viability of labour market reform: the case of employment protection

Credit Markets and Employment Protection: Towards a New Political Economy of Labor Market Reform∗

We build a simple model to show why the unemployed vote for employment protection. An unemployed individual who nds a job might face a credit constraint: the bank fears that the individual might lose his job and not repay the loan. Credit constraints for newly employed individuals become more severe as employment protection decreases. A decrease in employment protection also increases expected ...

Employment protection and unemployment

The second factor often mentioned in discussions of European unemployment is employment protection (the first, unernploymenr benefits, was the topic of the previous note). Employment protection, the argument goes, increases the cost of doing business, leads to sclerosis of the economy, and to high unemployment. The purpose of this note is to assess both the theoretical and the empirical merits ...