Impact of employment protection legislation on employment and exporting in select African countries |
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| Authors: | Tendai Gwatidzo Busani Moyo |
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| Institution: | 1. School of Economic and Business Sciences, University of the Witwatersrand, Private Bag 3, WITS 2050, South Africatendai.gwatidzo@wits.ac.za;3. Department of Economics, University of South Africa, Preller Street, Muckleneuk Ridge, Pretoria, South Africa |
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| Abstract: | Labour market flexibility is an important issue in both development and labour economics. More flexibility in the labour market is believed to facilitate job creation, but also makes it easy for employers to terminate employment contracts and may be in conflict with the notion of decent jobs as promoted by the International Labour Organization and workers' unions. It is therefore not surprising that labour market flexibility or inflexibility has received a lot of attention in the extant literature. Using a sample of about 4700 firms from six African countries, we investigate the impact of restrictive labour regulation on a number of economic outcomes and find that more restrictive labour market regulations are detrimental to export propensity, export intensity, investment and employment. Policy-makers must be cautious, however, when implementing employment regulations as too flexible regulations may benefit employers at the expense of employees. |
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| Keywords: | employment protection labour market flexibility African firms regulation exports employment investment |
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