Employment protection legislation, adjustment costs and cross-country differences in cost behavior

2013 ◽  
Vol 55 (1) ◽  
pp. 111-127 ◽  
Author(s):  
Rajiv D. Banker ◽  
Dmitri Byzalov ◽  
Lei (Tony) Chen
ILR Review ◽  
2017 ◽  
Vol 71 (2) ◽  
pp. 525-549 ◽  
Author(s):  
Inmaculada García Mainar ◽  
Colin P. Green ◽  
María Navarro Paniagua

Restrictive employment protection legislation has been highlighted as a key reason for lower labor productivity in Europe compared to the United States. Evidence in the literature has shown robust effects of employment protection on effort, though the effects appear too small to generate marked cross-country differences in labor productivity. The authors revisit this issue using representative data of private-sector workers in Spain. A range of legislative changes aimed at reducing the incidence of temporary employment are used to estimate the effect of permanent employment on one aspect of effort, absenteeism. Results suggest that being employed on a permanent contract increases the probability of being absent from work due to sickness by approximately 5.3 percentage points and the time absent by approximately 0.30 of a day per week. These results suggest that cross-country differences in employment protection have the potential to have a substantial impact on labor productivity.


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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