This paper examines both the determinants and the effects of changes in the rigidity of labor market legislation across countries over time. Recent research identifies the origin of the legal system as being a major determinant of the cross-country variation in the rigidity of employment...

Laws on hiring and firing are intended to protect workers from unfair behavior by employers, to counter imperfections in financial markets that limit workers' ability to insure themselves against job loss, and to preserve firm-specific human capital. But by imposing costs on firms' adaptation to...

This article surveys the literature and adds to the evidence on the impact of employment protection legislation on employment. While stringent employment protection contributes to less turnover and job reallocation, the effects on aggregate employment and unemployment over the business cycle are...

This paper presents and discusses various modalities of labour market flexibility and security. The focus is on employment protection legislation, part-time work and temporary agency work, drawing evidence and examples from the Netherlands, Denmark, Spain and the United States. The main thrust...

This paper is concerned with the evolutionary process of the global governance of labour migration, which has led to the progressive privatisation and commodification of international labour mobility. The focus is on the effects of such change on working conditions for migrants. In particular,...

Is privatization in a country related to the stringency of its employment protection laws (EPL) – and, if so, how? We address this question using privatization deals in fourteen European countries over three decades and all the changes in EPL within a country. Using traditional...

We use the staggered adoption of Wrongful Discharge Laws (WDLs) by U.S. state courts as a quasi-natural experiment to examine the causal impact of firing costs and employment protection on corporate payouts. We find that the greater employment protection imposed by WDLs leads to higher share...

Firms respond to laws increasing employee protection by reducing both employment and capital expenditures. They use earnings management to meet earnings benchmarks less while experiencing significantly higher returns on investments, suggesting that employee protection potentially constrains...

Labor courts may introduce a significant wedge between “legal” firing costs and “effective” (post-trial) firing costs. Apart from procedural costs, there is uncertainty over judges' rulings, in particular over the likelihood of a “fair” dismissal ultimately being ruled as...

Employment protection increases labor adjustment costs and hence the expected costs of financial distress for labor-intensive firms. It follows that these firms are likely to increase their cash holdings to reduce the risk of financial distress when employment protection is strengthened....