The Impact of Employment Protection Mandates on Demographic Temporary Employment Patterns: International Microeconomic Evidence

43 Pages Posted: 19 Apr 2005

See all articles by Lawrence M. Kahn

Lawrence M. Kahn

Cornell University - School of Industrial and Labor Relations; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

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Date Written: April 2005

Abstract

Using 1994-98 International Adult Literacy Survey (IALS) microdata, this paper investigates the impact of employment protection laws on the incidence of temporary employment by demographic group. More stringent employment protection for regular jobs is predicted to increase the relative incidence of temporary employment for less experienced and less skilled workers. I test this reasoning using IALS data for Canada, Finland, Italy, the Netherlands, Switzerland, the United Kingdom and the United States, countries with widely differing levels of mandated employment protection. Across these countries, the strength of such mandates (as measured by the OECD) is positively associated with the relative incidence of temporary employment for young workers, native women, immigrant women and those with low cognitive ability. These effects largely hold up when I adjust for the possible sample selection due to the fact that employment to population ratios differ across countries. Moreover, the effects of protection on the young, women, and immigrants are stronger in countries with higher levels of collective bargaining coverage, suggesting a connection between binding wage floors and the allocative effects of employment protection mandates.

Keywords: employment protection, temporary jobs

JEL Classification: J21, J23

Suggested Citation

Kahn, Lawrence M., The Impact of Employment Protection Mandates on Demographic Temporary Employment Patterns: International Microeconomic Evidence (April 2005). IZA Discussion Paper No. 1548. Available at SSRN: https://ssrn.com/abstract=702764

Lawrence M. Kahn (Contact Author)

Cornell University - School of Industrial and Labor Relations ( email )

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CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

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IZA Institute of Labor Economics

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