Job Protection : The Macho Hypothesis

This paper shows that the stringency of employment protection in Mediterranean countries can be partly explained by cultural values embedded in religion. Both the security provided by this legislation and its redistributive effects in favour of the male breadwinner insiders fit into the framework of Mediterranean religions. First, international individual surveys allow us to document that Catholics and Muslims are more likely to agree with traditional gender division of work than Protestants and the non-religious. Second, we develop a political economy model predicting that employment protection should be more stringent in countries where there is a larger share of insiders supportive of traditional family values. We then show that this prediction is supported by empirical evidence on OECD countries over the period 1970-99