Labour Relations and Modes of Employment
NEUJOBS Policy Brief D6.6
11 Pages Posted: 23 Jul 2013 Last revised: 19 Aug 2017
Date Written: May 1, 2013
In many European and other Western countries, labour markets will continue to be reformed in order to accommodate further adjustments to economic, demographic and socio-ecological developments. Moreover, labour market institutions and other aspects of labour markets receive a lot of attention in EU policy debates because they are regarded as key factors of innovation and economic growth. Indeed, our estimates indicate that generous unemployment benefit systems and stringent employment protection legislation lead to lower innovation intensity. These results suggest that high firing costs discourages investment in innovative activities. Interestingly, our case studies reveal that in Central and Eastern European countries institutions such as employment protection legislation and unemployment benefits appeared relatively unimportant to attracting large-scale inward investors. Instead, the lower wage level than in Western Europe appears to be a key factor, alongside the availability of large numbers of semi-skilled workers. We analyze the relationship between labour market institutions and innovation. Furthermore, we examine how EU countries pursue labour market policy reforms, focusing on the key policies of the flexicurity model. Finally, we asses the relative importance of labour market institutions in transitions on the labour market.
Keywords: Labour market policy, innovation, employment protection legislation, labour relations, Central and Eastern European countries
JEL Classification: H53, J50, J60
Suggested Citation: Suggested Citation