Impact of Labour Regulation on Unemployment: A Case Study of France, Germany, UK and USA

This paper examines the state of labour protection in four countries (UK, USA, France and Germany) during 1970-2006. It supports the contention of the legal-origin theory that UK and USA (common law countries) intervene less in the labour market and grant less protection to labourers. It also supports the proposition that the problem of unemployment is more acute in the civil law countries (France and Germany). But it finds no direct relationship between various aspects of labour regulation and unemployment rate. Hence, we conclude that the explanation of more acute unemployment problem in France and Germany should be sought elsewhere.