The Wage Effects of Employment Protection Legislation in Taiwan
نویسنده
چکیده
This study investigates the effects of employment protection on wages. The implementation of employment protection legislation increases employers’ firing costs and reduces labor turnover, and thus results in lower wages. Our empirical results show that the implementation of Taiwan’s Labor Standards Law leads to a reduction in wages, the effects of which varies with the stringency of the law’s enforcement. In addition, employment protection can lead to a decrease in wage dispersion, implying the worsening of job matches.
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