Employment Protection: Tough to Scrap or Tough to Get?

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

If legislating employment protection is a protracted process subject to time delays, then firms can dismiss workers before an increase in protection is implemented. Heightened risk of dismissal before implementation makes workers in countries with flexible labour markets reluctant to support proposals for more stringent protection. In the model developed in this article, this mechanism provides a novel source of status quo bias which can sustain differences in employment protection across countries. While in previous work status quo bias arises because a constituency effect makes employment protection difficult to deregulate, here the bias arises because protection is difficult to introduce. © 2007 The Author(s). Journal compilation © Royal Economic Society 2007.
Original languageEnglish
Pages (from-to)F386-F415
JournalEconomic Journal
Volume117
Issue number521
DOIs
Publication statusPublished - 2007

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Employment protection
Workers
Status quo bias
Flexible labour
Time delay
Economics
Labour market

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title = "Employment Protection: Tough to Scrap or Tough to Get?",
abstract = "If legislating employment protection is a protracted process subject to time delays, then firms can dismiss workers before an increase in protection is implemented. Heightened risk of dismissal before implementation makes workers in countries with flexible labour markets reluctant to support proposals for more stringent protection. In the model developed in this article, this mechanism provides a novel source of status quo bias which can sustain differences in employment protection across countries. While in previous work status quo bias arises because a constituency effect makes employment protection difficult to deregulate, here the bias arises because protection is difficult to introduce. {\circledC} 2007 The Author(s). Journal compilation {\circledC} Royal Economic Society 2007.",
author = "B.A. Brugemann",
year = "2007",
doi = "10.1111/j.1468-0297.2007.02061.x",
language = "English",
volume = "117",
pages = "F386--F415",
journal = "Economic Journal",
issn = "0013-0133",
publisher = "Wiley-Blackwell",
number = "521",

}

Employment Protection: Tough to Scrap or Tough to Get? / Brugemann, B.A.

In: Economic Journal, Vol. 117, No. 521, 2007, p. F386-F415.

Research output: Contribution to JournalArticleAcademicpeer-review

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AU - Brugemann, B.A.

PY - 2007

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N2 - If legislating employment protection is a protracted process subject to time delays, then firms can dismiss workers before an increase in protection is implemented. Heightened risk of dismissal before implementation makes workers in countries with flexible labour markets reluctant to support proposals for more stringent protection. In the model developed in this article, this mechanism provides a novel source of status quo bias which can sustain differences in employment protection across countries. While in previous work status quo bias arises because a constituency effect makes employment protection difficult to deregulate, here the bias arises because protection is difficult to introduce. © 2007 The Author(s). Journal compilation © Royal Economic Society 2007.

AB - If legislating employment protection is a protracted process subject to time delays, then firms can dismiss workers before an increase in protection is implemented. Heightened risk of dismissal before implementation makes workers in countries with flexible labour markets reluctant to support proposals for more stringent protection. In the model developed in this article, this mechanism provides a novel source of status quo bias which can sustain differences in employment protection across countries. While in previous work status quo bias arises because a constituency effect makes employment protection difficult to deregulate, here the bias arises because protection is difficult to introduce. © 2007 The Author(s). Journal compilation © Royal Economic Society 2007.

U2 - 10.1111/j.1468-0297.2007.02061.x

DO - 10.1111/j.1468-0297.2007.02061.x

M3 - Article

VL - 117

SP - F386-F415

JO - Economic Journal

JF - Economic Journal

SN - 0013-0133

IS - 521

ER -