Does Labour Law Hurt Labour by Reducing Employment in Developed and Emerging Countries?
34 Pages Posted: 8 Jun 2015 Last revised: 30 Mar 2017
Date Written: November 7, 2016
Abstract
Using longitudinal data on labour law for 108 countries over the period 1996-2013, the present study estimates the impact of labour regulation on total and youth employment. Using the dynamic panel data analysis it is observed that worker-protective labour laws including the dismissal law do not hamper the long-term employment prospects of the general work force and the youth population. Rather it provides a better legal environment for increasing employment opportunities. By and large this result holds in the two sub-samples: one consisting of 23 developed countries and the other consisting of 85 less-developed countries (including 26 ex-socialist countries).
Keywords: labour law, unemployment rate, long-term unemployment, youth unemployment
JEL Classification: K31, J08, J50, J60, J83
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