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dc.titleThe Economic Effects of Employment Protection: Evidence from International Industry-Level Data
dc.contributor.authorPagés, Carmen
dc.contributor.authorMicco, Alejandro
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageThe Caribbean
dc.coverageCentral America
dc.coverageSouth America
dc.date.available2010-10-28T00:00:00
dc.date.issue2007-12-01T00:00:00
dc.description.abstractThis paper examines the economic effects of employment protection legislation in a sample of developed and developing countries. Implementing a difference-in-differences test lessens the potentially severe endogeneity and omitted variable problems associated with cross-country regressions. This test is based on the hypothesis that employment protection regulations are more binding in sectors of activity exposed to higher volatility in demand or supply shocks. The analysis indicates that more stringent legislation slows down job turnover by a significant amount, and that this effect is more pronounced in sectors that are intrinsically more volatile. The paper also finds that employment and value added decline in the most affected sectors, and employment and output effects are driven by a decline in the net entry of firms. In contrast, average employment per plant is not significantly affected.
dc.format.extent40
dc.identifier.doihttp://dx.doi.org/10.18235/0010723
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/The-Economic-Effects-of-Employment-Protection-Evidence-from-International-Industry-Level-Data.pdf
dc.language.isoen
dc.mediumAdobe PDF
dc.publisherInter-American Development Bank
dc.subjectLabor
dc.subject.keywordsGross Job Flows;Employment;J63; Employment Protection Legislation;J32;WP-592; J23;Firm Entry and Exit;Employment Reallocation
dc.typeWorking Papers
idb.identifier.pubnumberWorking Papers
idb.operationRG-N3075
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