Skip to main content

The effect of employment protection and product market regulation on labour market performance: substitution or complementarity?

Buy Article:

$55.00 plus tax (Refund Policy)

Abstract:

This article provides new evidence on the linkages between various forms of market regulation and joblessness and its components, unemployment and inactivity. One crucial contribution of this article is the analysis of the interdependence across Product Market Regulation (PMR) and labour markets regulation (Employment Protection Legislation (EPL)). With the help of a dynamic fixed effect model with an interaction term, we estimate the marginal impact of EPL and PMR at different levels of the other interacted variable. To cope with problems related to the inclusion of time-invariant institutional variables in fixed effect models, we present results of regressions based on a new procedure, specifically designed to treat slowly changing variables. We build time-series data to account for the annual evolution of EPL, and use new data for unemployment insurance net replacement rates. Among other results, we find evidence of a positive (negative) effect of EPL (PMR) on employment performance as well as of substitution, rather than complementarity, between the two forms of regulation.

Document Type: Research Article

DOI: https://doi.org/10.1080/00036840903317367

Affiliations: 1: CES, University of Paris I, 75647 Paris cedex 13, France,CEPREMAP, 75013 Paris, France 2: CEPREMAP, 75013 Paris, France 3: University of Paris 13-CEPN, 75013 Paris, France

Publication date: 2011-02-01

More about this publication?
  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more