How does employment protection legislation influence hiring and firing decisions by the smallest firms?

2013 ◽  
Vol 121 (3) ◽  
pp. 444-448 ◽  
Author(s):  
Ana Millán ◽  
José María Millán ◽  
Concepción Román ◽  
André van Stel
Author(s):  
Yannick Van Landuyt ◽  
Nico Dewaelheyns ◽  
Cynthia Van Hulle

This article examines the effect of employment protection legislation (EPL) on small and medium-sized enterprise (SME) performance. Rather than relying on country-specific proxies for EPL, as is common in the literature, we compute firm-specific measures of a firm’s exposure to EPL by using a panel dataset of 13,112 Belgian SMEs for the period between 2000 and 2009. The empirical results show that firms perform better when faced with lower hiring and firing costs through the use of more blue-collar labour contracts. The evidence showing improved performance by firms that attempt to achieve greater flexibility by hiring more temporary workers is limited.


2014 ◽  
pp. 126-140
Author(s):  
O. Mironenko

Employers incur costs while fulfilling the requirements of employment protection legislation. The article contains a review of the core theoretical models and empirical results concerning the impact of these costs on firms’ practices in hiring, firing, training and remuneration. Overall, if wages are flexible or enforcement is weak, employment protection does not significantly influence employers’ behavior. Otherwise, stringent employment protection results in the reduction of hiring and firing rates, changes in personnel selection criteria, types of labour contracts and dismissal procedures, and, in some cases, it may lead to the growth of wages and firms’ investments to human capital.


Author(s):  
Samir Amine ◽  
Wilner Predelus

The merit of employment regulations in a market economy is often measured by their effectiveness in facilitating job creation without jeopardizing the notion of “decent work,” as defined by the International Labor Organization (ILO). Consequently, the recent literature on employment legislation has extensively focused on the flexibility of the labor market, as a fair middle ground is always necessary to avoid undue distortions that can negatively impact the economy and worker's wellbeing. This chapter analyzes the provisions of the labor law in Haiti and how it affects job security and flexibility to observe a flexible structure that rather benefits employers. Notably, labor law in Haiti may have in fact rendered workers more vulnerable because these labor legislations were enacted on the assumption that employers and workers are on the same footing when it comes to industrial relations, while historic facts do not support such an assumption.


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