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Does employment protection help immigrants? Evidence from European labor markets

Research output: Contribution to journalArticle

Original languageEnglish
Pages (from-to)624-642
Number of pages19
JournalLABOUR ECONOMICS
Volume18
Issue number5
DOIs
Publication statusPublished - Oct 2011

King's Authors

Abstract

High levels of employment protection reduce hiring and firing and have a theoretically ambiguous effect on the employment level. Immigrants, being new to the labor market, may be less aware of employment protection regulations and less likely to claim their rights, which may create a gap between the costs for employers of hiring a native relative to hiring an immigrant. This paper tests that hypothesis drawing on evidence for the EU and on two natural experiments for Spain and Italy. The results suggest that strict employment protection legislation (EPL) gives immigrants a comparative advantage relative to natives. Stricter EPL is found to reduce employment and reduce hiring and firing rates for natives. By contrast, stricter EPL has a much smaller effect on immigrants. (C) 2011 Elsevier B.V. All rights reserved.

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