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      Does employment protection affect unemployment? A meta-analysis

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      Oxford Economic Papers
      Oxford University Press (OUP)

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          Abstract

          Despite extensive research efforts, the magnitude of the effect of employment protection legislation (EPL) on unemployment remains unclear. This article applies meta-analysis and meta-regression methods to a unique data set consisting of 881 observations on the effect of EPL on unemployment from 75 studies. Once we control for publication selection bias, we cannot reject the hypothesis that the average effect of EPL on unemployment is zero. The meta-regression analysis, however, reveals that the choice of the EPL variable matters: estimates that build on survey-based EPL variables report a significantly stronger unemployment-increasing impact of EPL than estimates developed using EPL indices based on the OECD’s methodology, where the latter relies on coding information from legal provisions. Furthermore, using multi-year averages of the underlying data tends to dampen the reported unemployment effects of EPL, and product market regulation serves as a significant moderator variable.

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          Most cited references51

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          Bias in meta-analysis detected by a simple, graphical test

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            The Regulation of Labor

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              The Role of Shocks and Institutions in the Rise of European Unemployment: the Aggregate Evidence

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                Author and article information

                Contributors
                (View ORCID Profile)
                Journal
                Oxford Economic Papers
                Oxford University Press (OUP)
                0030-7653
                1464-3812
                November 28 2020
                November 28 2020
                Affiliations
                [1 ]Vienna Institute for International Economic Studies, Rahlgasse 3, Vienna, Austria
                [2 ]Institute for Comprehensive Analysis of the Economy (Johannes Kepler University Linz), Aubrunnerweg 3a, Linz, Austria; e-mail: heimberger@wiiw.ac.at
                Article
                10.1093/oep/gpaa037
                b0fc803a-6341-41a8-b10a-6df58c2f3f5a
                © 2020

                https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model

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