TY  - RPRT
        AU  - Micco, Alejandro
AU  - Pagés, Carmen
        TI  - The Economic Effects of Employment Protection: Evidence from International Industry-Level Data
        PY  - 2006/Nov/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 2433
        UR  - https://www.iza.org/index.php/publications/dp2433
        AB  - This paper examines the economic effects of employment protection legislation in a sample of developed and developing countries. By implementing a difference-in-differences test, we lessen 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. Our 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. We also find that employment and value added in the most affected sectors decline. 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.
        KW  - employment protection legislation
KW  - employment reallocation
KW  - gross job flows
KW  - employment
KW  - firm entry and exit
        ER  -