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Employment Protection Legislation and Firm Growth: Evidence from a Natural Experiment
Dalarna University, School of Technology and Business Studies, Economics. Örebro university.
Dalarna University, School of Technology and Business Studies, Economics. HUI.
Dalarna University, School of Technology and Business Studies, Economics.
2014 (English)Report (Other academic)
Abstract [en]

A natural experiment is used to identify the causal relationship between employment protection legislation and fi…rm growth. The natural experiment occurred in Sweden in 2001, when an exemption made it possible for fi…rms with less than eleven employees to exclude two workers from the last-in-fi…rst-out principle when dismissing personnel. The estimated average treatment effect of the reform show that the number of employees increased with 0.135 percent in fi…rms with 5-9 employees relative to fi…rms with 10-15 employees, which corresponds to over 5,000 additional jobs per year created by the reform. Firms with ten employees, just below the size threshold, became 3.4 percent less likely to increase their workforce to a level surpassing the threshold, indicating that the last-in-…first-out rule prevented these …firms from growing. Thus, employment protection legislation seems to act as a growth barrier for small fi…rms.

Place, publisher, year, edition, pages
Borlänge: Högskolan Dalarna, 2014. , 51 p.
Series
Working papers in transport, tourism, information technology and microdata analysis, ISSN 1650-5581 ; 2014:05
Keyword [en]
Firm growth, Growth barriers, Employment protection
National Category
Economics
Research subject
Komplexa system - mikrodataanalys
Identifiers
URN: urn:nbn:se:du-13932OAI: oai:DiVA.org:du-13932DiVA: diva2:703608
Available from: 2014-03-07 Created: 2014-03-07 Last updated: 2015-01-12Bibliographically approved
In thesis
1. Unseen Job Creators and Seniority Rules: Two essays on firm growth barriers
Open this publication in new window or tab >>Unseen Job Creators and Seniority Rules: Two essays on firm growth barriers
2014 (English)Licentiate thesis, comprehensive summary (Other academic)
Place, publisher, year, edition, pages
Högskolan Dalarna, 2014
National Category
Economics
Research subject
Komplexa system - mikrodataanalys
Identifiers
urn:nbn:se:du-16661 (URN)
Opponent
Supervisors
Available from: 2015-01-12 Created: 2015-01-12 Last updated: 2015-01-12Bibliographically approved

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fulltext(580 kB)151 downloads
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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf