Znaczenie prawnej ochrony zatrudnienia dla elastyczności zatrudnienia w krajach OECD

Przemysław Włodarczyk,Eugeniusz Kwiatkowski

doi:10.33119/gn/100730

Abstract

This article explores the impact of employment protection legislation on the elasticity of employment with respect to GDP. We present the essence and scope of changes in employment protection and specify the theoretical mechanisms of its impact on the labor market. We also measure this impact using data for 23 OECD countries in the 2002-2014 period. In the short term, we should expect the existence of a non-linear (U-shaped) relationship between the level of employment protection legislation (EPL) and the elasticity of employment. In the long term, however, EPL is perceived as neutral for the level of employment as flexible wages enable employers to accommodate changes in the labor market situation. The hypothesis of the long-term neutrality of EPL for labor market categories was confirmed with the use of panel cointegration tests. The hypothesis concerning the impact of EPL on short-term labor market adjustments was confirmed only for the global crisis period.

Highlights

Employment protection legislation (EPL) is one of the major institutional determinants of the employment relationship
The results of analyses which investigated the impact of employment protection legislation (EPL) on the employment level point in a similar direction, as the majority of them state that more protective regulations result in lower employment
The econometric analyses presented in this paper extend our previous results, as we embed our considerations into an error correction (ECM) framework, which enables us to make inferences about the character of both the short- and long-term influence of EPL on employment elasticity

Summary

Introduction

Employment protection legislation (EPL) is one of the major institutional determinants of the employment relationship. We assume rigid wages and accept the hypothesis (developed by Blanchard, Summers [1986], Greenwald, Stiglitz [1995], Malul et al [2011]) about the existence of a non-linear (U-shaped) relationship between the elasticity of employment to GDP and the restrictiveness of EPL (see : Kwiatkowski, Włodarczyk [2012]).

Results

Conclusion