Firm dynamics and employment protection: evidence from sectoral data
SULIS, GIOVANNI
2017-01-01
Abstract
We analyze the impact of employment protection legislation (EPL) on firms’ entry and exit rates in a set of industries in thirteen OECD countries from the most recent version of the OECD Structural and Business Statistics Database. Using a difference-in-differences identification strategy, we find that more stringent EPL is associated to both lower entry and exit in industries characterized by higher worker reallocation intensity. We decompose the overall effect of EPL and find that both collective and individual dismissal regulations reduce the entry and exit rates. The negative effects of EPL are stronger for small firms. An extensive robustness analysis confirms our main findings.Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.