Job protection legislation and productivity growth in OECD countries |
| |
Authors: | Andrea Bassanini Luca Nunziata Danielle Venn |
| |
Institution: | OECD and ERMES-TEPP, UniversitéParis 2;Universitàdi Padova and IZA;OECD |
| |
Abstract: | We examine the effect of dismissal regulation on productivity in the OECD, using annual cross-country aggregate data on the stringency of employment protection legislation and industry-level data on productivity from 1982 to 2003. Our empirical results suggest that mandatory dismissal regulations have a depressing impact on productivity growth in industries where layoff restrictions are more likely to be binding. By contrast, we find no evidence of a productivity effect of regulations concerning temporary contracts, which suggests that partial reforms, facilitating the use of fixed-term and atypical contracts, are unlikely to have an important impact on efficiency and technological change and cannot therefore be a substitute for comprehensive reforms whereby dismissal restrictions for open-ended contracts are also weakened. --- Andrea Bassanini, Luca Nunziata and Danielle Venn |
| |
Keywords: | |
|
|