Employment Protection in Industrialized Countries: The Case for New Indicators

摘要: The poor employment performance of European countries compared with that the U.S. is often attributed to strictness protection in Europe. Many believe differences labour market regulations play an important role explaining international outcomes. This argument clearly has strong implications for policy design. If tight rules governing are be blamed performance, then conservative governments may reduce restraints on ability firms hire and fire (by weakening trade unions example). controversial proposition generated a considerable literature much debate. Theoretical models show does tend have constraining effect both layoffs hirings, job creation destruction, unemployment inflows outflows, extent which one dominates other depending values parameters. It follows played by determining aggregate outcomes mainly empirical question. However, available evidence relationship between based highly imperfect measures legislation (EPL).1 While work – theoretical been done subject, few studies focused how measured. Previous research circumvented measurement difficulties using qualitative rankings EPL stringency. But recent developments notably ongoing reforms most expansion non-standard forms not only rendered existing information obsolete, they also called into question methodological basis research.