TY  - RPRT
        AU  - Cahuc, Pierre
AU  - Carry, Pauline
AU  - Malherbet, Franck
AU  - Martins, Pedro S.
        TI  - Employment Protection Reforms: From Firm-Level Effects to Aggregate Outcomes
        PY  - 2026/Sep/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 18909
        UR  - https://www.iza.org/publications/dp18909
        AB  - Employment protection legislation often varies with firm or establishment size and age, and many evaluations of EPL reforms exploit these thresholds. This paper develops a search-and-matching model with multi-establishment firms to disentangle direct effects from general-equilibrium spillovers. We combine the model with quasi-experimental evidence from a 2009 Portuguese reform that restricted fixed-term contracts in young establishments of large firms. Spillovers barely distort the reduced-form estimate, yet they overturn the aggregate conclusion: extrapolating the reduced-form estimate implies a 1.51% employment decline, compared with a 0.11% increase in general equilibrium. Counterfactuals show that conditioning EPL on size versus age can yield opposite welfare effects, even when employment effects are similar, and that fixed-term contract and firing restrictions must be evaluated jointly.
        KW  - employment protection legislation
KW  - general-equilibrium spillovers
KW  - fixed-term contracts
KW  - contingent regulation
KW  - directed search
KW  - structural estimation
        ER  -