Social Sciences
4 years ago

Flexibility in labor market rules boosts productivity, study finds.

RePEc: Research Papers in Economics
The Effect of Employment Protection on Labor Productivity
Carl Magnus Bjuggren

Paper Summary

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Employment protection rules can impact how productive workers are. A study in Sweden looked at how changing these rules affected small firms. In 2001, a reform allowed small firms to exempt some workers from seniority rules. The study found that more flexibility in the labor market led to higher productivity. This increase wasn't because of better equipment or worker education levels.