Munich Personal RePEc Archive

Labour shares, employment protection and unions in European economies

Damiani, Mirella and Pompei, Fabrizio and Andrea, Ricci (2018): Labour shares, employment protection and unions in European economies. Published in: Socio-Economic Review (June 2018)

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We analyse the role that the liberalization of temporary contracts plays in labour share in some EU countries. The empirical analysis mainly relies on the EUKLEMS database and applies a difference-in-difference approach. Our results, focused on periods of different length (1996–2007 and 1996–2013), show that legislative innovations that favour the extensive use of temporary contracts negatively affect the labour share, likely because they lower employees’ average compensations. We hypothesize that these labour reforms, which lead to enduring skill deficits, thus failing to halt the erosion of the labour share of previous decades.

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