Analysis of employment protection legislation: a model with endogenous labour productivity

Lisi, Domenico (2008): Analysis of employment protection legislation: a model with endogenous labour productivity.

Abstract

This paper analyzes the effects of the different Employment Protection Legislation on the workers choices on effort. The different EPL are modelled through an easy theoretical pattern, characterized by endogenous labour productivity. In particular, it is analyzed how the labour productivity is influenced by the incentives that the different EPL give workers. The model outcomes highlight that the recent reforms produce only a positive temporary effect on the unemployment level, as emphasized by the empirical evidence. Finally, this paper analyzes a new contractual regime in order to see if it could offer in theory a better solution in term of structural employment respect to known standard regimes.

• Item Type: MPRA Paper
• Language: English
• Keywords: Employment Protection Legislation; Effort; Contractual Benchmark.
• Subjects: L - Industrial Organization > L5 - Regulation and Industrial Policy > L59 - Other; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J33 - Compensation Packages ; Payment Methods; J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J50 - General

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