Employment Protection

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Lawrence M. Kahn - One of the best experts on this subject based on the ideXlab platform.

  • permanent jobs Employment Protection and job content
    Industrial Relations, 2018
    Co-Authors: Lawrence M. Kahn
    Abstract:

    Using Programme for the International Assessment of Adult Competencies (PIAAC) data for twenty†one countries, I study the impact of Employment Protection laws (EPL) on job content. I find that workers’ use of influence, reading, writing, planning, numeracy and information and computer technology skills, and their task discretion, were higher in permanent than in temporary jobs. Moreover, stricter EPL on permanent jobs raised the gap in job content for influence, reading, writing, and planning skills used in permanent jobs versus temporary jobs.

  • Permanent Jobs, Employment Protection and Job Content
    Industrial Relations, 2018
    Co-Authors: Lawrence M. Kahn
    Abstract:

    Using Programme for the International Assessment of Adult Competencies (PIAAC) data for 21 countries, I study the impact of Employment Protection laws (EPL) on job content. Economic theories predict that stricter Protection increases workers' willingness to make firm-specific investments. These theories also predict that stricter Protection leads firms to raise their hiring and promotion standards for permanent jobs. Both of these mechanisms predict higher levels of job content in permanent than in temporary jobs; further, it is predicted that stricter EPL increases the gap in job content between permanent and temporary jobs due both to workers' investments and firm hiring standards. I found support for both sets of predictions. First, in almost all cases, workers' self-reported use of influence, reading, writing, planning, numeracy and ict skills, and their task discretion, were higher in permanent than in temporary jobs. Second, stricter EPL raised the gap in job content for influence, reading, writing and planning skills used in permanent jobs vs. temporary jobs, controlling for industry, occupation and human capital. This finding suggests that workers are making firm-specific (or perhaps occupation- or industry- specific) investments that raise their productivity levels and thus warrant higher level job content. These effects became larger when I did not control for industry, occupation, government Employment, and human capital variables including schooling, actual labor market experience, cognitive test scores and nativity status. The larger effects of EPL without these controls provide some indirect support for the idea that EPL leads firms to raise their hiring standards.

  • Employment Protection reforms Employment and the incidence of temporary jobs in europe 1996 2001
    Labour Economics, 2010
    Co-Authors: Lawrence M. Kahn
    Abstract:

    This paper uses longitudinal data on individuals from the European Community Household Panel over the 1996-2001 period to investigate the impact of reforms of Employment Protection systems in nine countries on the incidence of Employment and of temporary jobs for wage and salary workers. Important features of the research design include the use of individual fixed effects models as well as the inclusion of country-specific trends in the dependent variable. A robust finding is that policies making it easier to create temporary jobs on average raise the likelihood that wage and salary workers will be in temporary jobs. This effect is felt primarily when the regional unEmployment rate is relatively high. However, there is no evidence that such reforms raise Employment. Thus, these reforms, while touted as a way of jump-starting individuals' careers in the job market, appear rather to encourage a substitution of temporary for permanent work.

  • Employment Protection reforms Employment and the incidence of temporary jobs in europe 1995 2001
    2008
    Co-Authors: Lawrence M. Kahn
    Abstract:

    Using European Community Household Panel data for nine countries for 1996-2001, I investigate the impact of reforms of Employment Protection systems on Employment and on temporary jobs for wage and salary workers. Individual fixed effects models are estimated, with the inclusion of country-specific trends in the dependent variable, addressing the possibly changing labor force composition and the possible endogeneity of the reforms. A basic finding that is robust to all specifications and to the disaggregation of the sample by country is that policies making it easier to create temporary jobs raise the likelihood that wage and salary workers will be in temporary jobs. However, there is no evidence that such reforms raise Employment, and in some countries, they appear to lower Employment. Thus, these reforms appear rather to encourage a substitution of temporary for permanent work. Reforms of permanent Employment Protection mandates have small and insignificant effects on Employment and temporary jobs on average. Moreover, when I disaggregate by country, such reforms appear more often to lower overall Employment and to lower the share of Employment in permanent jobs. These are likely to reflect short run impacts of such reforms, which make it easier for firms to discharge substandard workers.

  • the impact of Employment Protection mandates on demographic temporary Employment patterns international microeconomic evidence
    The Economic Journal, 2007
    Co-Authors: Lawrence M. Kahn
    Abstract:

    Using 1994-98 International Adult Literacy Survey (IALS) microdata, this paper investigates the impact of Employment Protection laws on the incidence of temporary Employment by demographic group. More stringent Employment Protection for regular jobs is predicted to increase the relative incidence of temporary Employment for less experienced and less skilled workers. I test this reasoning using IALS data for Canada, Finland, Italy, the Netherlands, Switzerland, the United Kingdom and the United States, countries with widely differing levels of mandated Employment Protection. Across these countries, the strength of such mandates (as measured by the OECD) is positively associated with the relative incidence of temporary Employment for young workers, native women, immigrant women and those with low cognitive ability. These effects largely hold up when I adjust for the possible sample selection due to the fact that Employment to population ratios differ across countries. Moreover, the effects of Protection on the young, women, and immigrants are stronger in countries with higher levels of collective bargaining coverage, suggesting a connection between binding wage floors and the allocative effects of Employment Protection mandates.

Clemens Fuest - One of the best experts on this subject based on the ideXlab platform.

  • experience rating versus Employment Protection laws in a model where firms monitor workers
    Social Science Research Network, 2005
    Co-Authors: Julia Fath, Clemens Fuest
    Abstract:

    While layoff costs in the U.S. are mostly due to experience-rated unEmployment insurance, layoff costs in European labour markets are primarily a consequence of Employment Protection laws. In this paper we compare the effects of experience rating and Employment Protection laws on Employment and welfare in a model where unEmployment arises due to efficiency wage setting and where labour turnover is inefficiently high. We show that a revenue-neutral introduction of experience rating reduces labour turnover and increases Employment and welfare. The introduction of Employment Protection laws may also reduce labour turnover but Employment declines.

  • experience rating versus Employment Protection laws in a model where firms monitor workers
    The Scandinavian Journal of Economics, 2005
    Co-Authors: Julia Fath, Clemens Fuest
    Abstract:

    While layoff costs in the U.S. are mostly due to experience-rated unEmployment insurance, layoff costs in European labour markets are primarily a consequence of Employment Protection laws. In this paper we compare the effects of experience rating and Employment Protection laws on Employment and welfare in a model where unEmployment arises due to efficiency wage setting and where labour turnover is inefficiently high. We show that a revenue-neutral

Carmen Gómez - One of the best experts on this subject based on the ideXlab platform.

Julia Fath - One of the best experts on this subject based on the ideXlab platform.

  • experience rating versus Employment Protection laws in a model where firms monitor workers
    Social Science Research Network, 2005
    Co-Authors: Julia Fath, Clemens Fuest
    Abstract:

    While layoff costs in the U.S. are mostly due to experience-rated unEmployment insurance, layoff costs in European labour markets are primarily a consequence of Employment Protection laws. In this paper we compare the effects of experience rating and Employment Protection laws on Employment and welfare in a model where unEmployment arises due to efficiency wage setting and where labour turnover is inefficiently high. We show that a revenue-neutral introduction of experience rating reduces labour turnover and increases Employment and welfare. The introduction of Employment Protection laws may also reduce labour turnover but Employment declines.

  • experience rating versus Employment Protection laws in a model where firms monitor workers
    The Scandinavian Journal of Economics, 2005
    Co-Authors: Julia Fath, Clemens Fuest
    Abstract:

    While layoff costs in the U.S. are mostly due to experience-rated unEmployment insurance, layoff costs in European labour markets are primarily a consequence of Employment Protection laws. In this paper we compare the effects of experience rating and Employment Protection laws on Employment and welfare in a model where unEmployment arises due to efficiency wage setting and where labour turnover is inefficiently high. We show that a revenue-neutral

Giovanni Pica - One of the best experts on this subject based on the ideXlab platform.

  • Employment Protection legislation capital investment and access to credit evidence from italy
    The Economic Journal, 2016
    Co-Authors: Federico Cingano, Marco Leonardi, Julian Messina, Giovanni Pica
    Abstract:

    This article estimates the causal impact of dismissal costs on capital deepening and productivity, exploiting a reform that introduced unjust-dismissal costs in Italy for firms below 15 employees, leaving firing costs unchanged for larger firms. We show that the rise in firing costs induced an increase in the capital-labour ratio and a decline in total factor productivity in small firms relative to larger firms. Our results indicate that capital deepening was more pronounced at the low-end of the capital distribution - where the reform hit arguably harder - and among firms endowed with a larger amount of liquid resources. We also find that stricter Employment Protection Legislation (EPL) raised the share of high-tenure workers, which suggests a complementarity between firm-specific human capital and physical capital in moderate EPL environments. [ABSTRACT FROM AUTHOR]

  • who pays for it the heterogeneous wage effects of Employment Protection legislation
    The Economic Journal, 2013
    Co-Authors: Marco Leonardi, Giovanni Pica
    Abstract:

    This study estimates the effect of Employment Protection legislation on wages, exploiting the 1990 Italian reform that introduced unjust dismissal costs for firms below 15 employees. We find that the slight average wage reduction induced by the reform hides highly heterogeneous effects. Workers who change firm during the reform period suffer a drop in the entry wage, while incumbent workers are left unaffected. Also, the negative effect of the reform is stronger for young blue collars, low-wage workers and workers in low-Employment regions. This pattern suggests that the ability of employers to shift firing costs onto wages depends on workers’ relative bargaining power.

  • Employment Protection legislation capital investment and access to credit evidence from italy
    2013
    Co-Authors: Federico Cingano, Marco Leonardi, Julian Messina, Giovanni Pica
    Abstract:

    Employment Protection may affect both productivity and capital investment because higher adjustments costs hamper allocative efficiency and may therefore affect both the optimal capital labor input mix and total factor productivity. To estimate the impact of dismissal costs on capital deepening and productivity we exploit a reform that introduced unjust-dismissal costs in Italy for firms below 15 employees, leaving firing costs unchanged for bigger firms. We provide evidence that the increase in firing costs induced capital deepening and a decline in total factor productivity in small firms relative to larger firms after the reform. We also find that capital deepening is more pronounced at the low-end of the capital distribution – where the reform arguably hit harder – and among firms endowed with a larger amount of liquid resources, that have more room to react thanks to an easier access to the credit market. Our results also indicate that the EPL reform reduced the probability to access the credit market, possbily because stricter EPL reduces both the value of the firm and the amount of internal resources that the firm can pledge as collateral against lenders.

  • who pays for it the heterogeneous wage effects of Employment Protection legislation
    2010
    Co-Authors: Marco Leonardi, Giovanni Pica
    Abstract:

    Theory predicts that the wage effects of government-mandated severance payments depend on workers' and firms' relative bargaining power. This paper estimates the effect of Employment Protection legislation (EPL) on workers' individual wages in a quasi-experimental setting, exploiting a reform that introduced unjust-dismissal costs in Italy for firms below 15 employees and left firing costs unchanged for bigger firms. Accounting for the endogeneity of the treatment status, we find that high-bargaining power workers (stayers, white collar and workers above 45) are almost left unaffected by the increase in EPL, while low-bargaining power workers (movers, blue collar and young workers) suffer a drop both in the wage level and its growth rate.