Abstract
The aim of this research was to identify the determinants of the employment protection legislation reforms in the global perspective. The study was based on the Labor Freedom index published by the Heritage Foundation, which allowed to include 179 countries in the research that were observed in the period 2003–2013. The conducted study has indicated that changes in GDP and the level of employment in industry may induce the introduction of labor reforms. The changes in the labor law also occurred to be correlated with the number of the nearly excluded from the labor market (the long-term unemployed and youth not in education, employment or training) and also with changes in the government expenditure. However, all these factors may lead to substantially various reform programs in particular countries due to the heterogeneous political pressure of the labor market interest groups and different governmental determination in introduction of the reforms.
Highlights
The labor economics literature has generated a lively and continuously growing discussion concerning the role of labor market regulations for the labor market performance for the last three decades (Blanchard, 2006, pp. 13-35)
It was decided to use the index of Labor Freedom that is published by the Heritage Foundation (2014) as a quantitative measure of the employment protection legislation
The aim of this research was to identify the determinants of the employment protection legislation reforms around the world
Summary
The labor economics literature has generated a lively and continuously growing discussion concerning the role of labor market regulations for the labor market performance for the last three decades (Blanchard, 2006, pp. 13-35). There are no doubts that the situation on the labor market is dependent on its institutional framework (Lehmann & Muravyev, 2012). In this context it is quite surprising that only a relatively small number of studies was aimed at answering the question of what determines the labor institutional framework in the particular countries. There is a need to develop this strand of research by conducting more analyses on determinants of the changes of the labor market institutions and by expanding the geographical scope of these studies. The group of the analyzed countries comprises of 179 entities, while the time scope is 2003–2013
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