Employment Protection and Labour Mobility in Europe: an empirical analysis using the EU's labour force survey

Abstract

Does dismissal protection stabilise employment contracts? This study analyses whether the different dismissal laws in the EU countries have an impact on employment stablitiy or, to put it the other way around, whether worker mobility is higher in less regulated labour markets. The paper first discusses the national dismissal laws and some methodological issues and then presents an econometric anaylsis of data from the EU's labour force survey. The study concludes that national regulations have an impact on employment stability but that industry-specific variables and the macroeconomic situaion are also important.