Does Employment Protection Reduce the Demand for Unskilled Labor?

Kirsten Daniel () and William Siebert ()
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Kirsten Daniel: Loyola University

No 1290, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Perhaps it does. We propose a model in which workers with little education or in the tails of the age distribution – the inexperienced and the old – have more chance of job failure (mismatch). Recruits’ average education should then increase and the standard deviation of starting age decrease when strict employment protection raises hiring and firing costs. We test the model using annual distributions of recruits’ characteristics from a 1975-95 panel of plants in Belgium, the Netherlands, Italy, the UK and the US. The model’s predictions are supported using the Blanchard-Wolfers index of employment protection as well as our alternative index.

Keywords: employment protection; labor demand; unskilled workers; firm panel data (search for similar items in EconPapers)
JEL-codes: J21 J83 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2004-09
New Economics Papers: this item is included in nep-lab and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published - published in: International Economic Journal, 2005, 19 (2), 197-222

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Journal Article: Does employment protection reduce the demand for unskilled labour? (2005)
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