Does employment protection lead to unemployment? A panel data analysis of OECD countries, 1990-2008

Sarkar, Prabirjit (2011): Does employment protection lead to unemployment? A panel data analysis of OECD countries, 1990-2008.

Abstract

This paper analysed the OECD data on employment protection for 23 OECD countries over the time span 1990-2008 on the basis of alternative dynamic panel data models and panel causality tests and examines the validity of the neo-liberal argument that strictness of employment protection hurts labour through increased long-term and youth unemployment rates. While it finds no empirical basis for this orthodox standpoint it observes that long-term unemployment dampens aggregate production which in turn aggravates unemployment problem.

• Item Type: MPRA Paper
• Language: English
• Keywords: labour law; regular job protection; temporary job protection, unemployment rate; long-term unemployment; youth unemployment
• Subjects: J - Labor and Demographic Economics > J0 - General > J08 - Labor Economics Policies; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J60 - General; K - Law and Economics > K3 - Other Substantive Areas of Law > K31 - Labor Law; J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J50 - General

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