The Economic Effects of Employment Protection: Evidence from International Industry-Level Data

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dc.creator Pagés-Serra, Carmen
dc.creator Micco, Alejandro 2010-10-28T22:55:58Z 2010-10-28T22:55:58Z 2007-12-01 2014-09-08T21:42:26Z 2014-09-08T21:42:26Z 2014-09-08
dc.identifier J - Labor and Demographic Economics::J3 - Wages, Compensation, and Labor Costs::J32 - Nonwage Labor Costs and Benefits; Private Pensions
dc.identifier J - Labor and Demographic Economics::J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement::J23 - Employment Determination; Job Creation; Demand for Labor; Self-Employment
dc.identifier J - Labor and Demographic Economics::J6 - Mobility, Unemployment, and Vacancies::J63 - Turnover; Vacancies; Layoffs
dc.description This paper examines the economic effects of employment protection legislation in a sample of developed and developing countries. Implementing a difference-in-differences test lessens the potentially severe endogeneity and omitted variable problems associated with cross-country regressions. This test is based on the hypothesis that employment protection regulations are more binding in sectors of activity exposed to higher volatility in demand or supply shocks. The analysis indicates that more stringent legislation slows down job turnover by a significant amount, and that this effect is more pronounced in sectors that are intrinsically more volatile. The paper also finds that employment and value added decline in the most affected sectors, and employment and output effects are driven by a decline in the net entry of firms. In contrast, average employment per plant is not significantly affected.
dc.format 40
dc.format ACROBAT
dc.language en
dc.subject Emprego
dc.subject Labor
dc.subject Empleo
dc.subject Gross Job Flows
dc.subject Employment
dc.subject Firm Entry and Exit
dc.subject Employment Reallocation
dc.subject J63; Employment Protection Legislation
dc.subject J32
dc.subject WP-592; J23
dc.title The Economic Effects of Employment Protection: Evidence from International Industry-Level Data
dc.type Working Papers

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