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Employment Protection Laws: Policy Issues and Recent Research

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  • Peter Kuhn

Abstract

Employment protection laws abound in the developed world; in Canada they primarily take the form of advance notice requirements of up to four months for layoffs. Recent research on the partial-equilibrium effects of such notice requirements reveals that they are effective in reducing the unemployment experienced by displaced workers; unfortunately however these effects dissipate rather quickly over time, implying that advance notice has little effect on long-term unemployment. Also, there appear to be few incremental gains to raising mandatory notice periods much beyond one month. Research on the general-equilibrium effects of employment protection laws on national employment, unemployment, and wage rates is much scarcer and at this point rather inconclusive. Interactions between employment protection laws and the unemployment insurance system are identified as an important topic for future research.

Suggested Citation

  • Peter Kuhn, 1993. "Employment Protection Laws: Policy Issues and Recent Research," Canadian Public Policy, University of Toronto Press, vol. 19(3), pages 279-297, September.
    • Handle: RePEc:cpp:issued:v:19:y:1993:i:3:p:279-297
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    Cited by:

    1. Peter Kuhn, "undated". "Canada and the "OECD Hypothesis": Does Labour Market Inflexibility Explain Canada's High Level of Unemployment?," Canadian International Labour Network Working Papers 10, McMaster University.
    2. Groenewold, Nicolaas, 1999. "Employment Protection and Aggregate Unemployment," Journal of Macroeconomics, Elsevier, vol. 21(3), pages 619-630, July.
    3. Andreas Hornstein & Mingwei Yuan, 1999. "Can a Matching Model Explain the Long-Run Increase in Canada's Unemployment Rate?," Canadian Journal of Economics, Canadian Economics Association, vol. 32(4), pages 878-905, August.
    4. Ben Tomlin, 2008. "Clearing Hurdles: Key Reforms to Make Small Business More Successful," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 264, May.

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