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Employment Protection Legislation and Catching up

Author

Listed:
  • Ton Van Schaik

    (Economics - Tilburg University [Netherlands])

  • Theo van De Klundert

    (Economics - Tilburg University [Netherlands])

Abstract

After WW II productivity growth in Europe and Japan was driven by catching-up with the US. Institutions in Europe were different too and were well suited for economic growth through imitation and adaptation of the technology to local circumstances. Catching up is, however, a self-defeating process. It ends when the technology frontier is attained or when in case of conditional convergence institutions set a limit to the process of catching up. Once this situation is reached, the existing institutions may no longer be appropriate. Regression analysis on a panel of 21 OECD-countries reveals that employment protection legislations (EPL) had a positive impact on productivity growth in the period of rapid convergence in the sixties and seventies. However, from the eighties onwards the total effect of EPL on labour productivity growth was negative.

Suggested Citation

  • Ton Van Schaik & Theo van De Klundert, 2011. "Employment Protection Legislation and Catching up," Post-Print hal-00747937, HAL.
    • Handle: RePEc:hal:journl:hal-00747937
    DOI: 10.1080/00036846.2011.613784
    Note: View the original document on HAL open archive server: https://hal.science/hal-00747937
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    References listed on IDEAS

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    Cited by:

    1. Conti, Maurizio & Sulis, Giovanni, 2016. "Human capital, employment protection and growth in Europe," Journal of Comparative Economics, Elsevier, vol. 44(2), pages 213-230.

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