The Economic Significance of Laws Relating to Employment Protection and Different Forms of Employment: Analysis of a Panel of 117 Countries, 1990-2013

Abstract

The authors use time series econometric analysis applying non‐stationary panel data methods to estimate the relationships between employment protection legislation and legal protection of different forms of employment (part‐time, fixed‐term and agency work), and economic outcomes, with a data set based on the Centre for Business Research Labour Regulation Index (CBR–LRI), covering 117 countries from 1970 to 2013. Findings suggest that these laws have become significantly more protective over time and that strengthening worker protection is associated with an increase in labour's share of national income, rising labour force participation, rising employment, and falling unemployment, although the observed magnitudes are small when set against wider economic trends.