Dependent self-employment as a way to evade employment protection legislation

2009 ◽  
Vol 37 (3) ◽  
pp. 363-392 ◽  
Author(s):  
Concepción Román ◽  
Emilio Congregado ◽  
José María Millán
Author(s):  
Christopher Cramer ◽  
John Sender ◽  
Arkebe Oqubay

Most economists think there is little wage employment in Africa and doubt the potential for faster growth of paid employment. They favour supply-side measures encouraging self-employment. The statistical base of conventional views is extremely unreliable. Even the poor statistics that are available do not support pessimism about wage employment in African countries, which has been expanding (and as a share of total employment). Huge numbers of wage workers, including women in domestic service, agricultural child workers, and, often, factory workers, are also invisible in the data. There is no reason for pessimistic predictions about slow fertility rate decline in Africa. There are realistic policies to encourage a faster rate of growth of wage opportunities, for example, to increase demand for young and female rural workers. Also, employment protection legislation (EPL) is not a brake on investment, productivity increases, and growth; excessive labour market ‘flexibility’ subsidizes inefficient enterprises.


Author(s):  
Werner Liebregts ◽  
Erik Stam

Labour market institutions enable and constrain individual behaviour on the labour market and beyond. We investigate two main elements of national employment protection legislation and their effects upon entrepreneurial activity. We use multilevel analyses to estimate the separate impact of redundancy payments and the notice period for employers on independent entrepreneurship (self-employment) and entrepreneurial employee activity. Redundancy payments and notice period reflect labour market friction, opportunity cost, search time and liquidity constraint mechanisms contained in employment protection legislation. Country-level legislation on the notice period for employers is found to be positively related to an individual‘s involvement in entrepreneurial employee activity, yet negatively related to self-employment. We do not find consistent effects of redundancy pay legislation on entrepreneurial activity.


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