6533b853fe1ef96bd12ad7fc
RESEARCH PRODUCT
Labour Market Regulations and Capital Intensity
Gilbert CetteJacques MairesseJimmy Lopezsubject
Labour economics050208 financeEmployment protection legislationEconomic capital05 social sciences1. No poverty[SHS.ECO]Humanities and Social Sciences/Economics and FinancePhysical capitalFinancial capitalCost of capitalCapital deepening0502 economics and business8. Economic growthCapital employedCapital intensityBusiness050207 economics[SHS.ECO] Humanities and Social Sciences/Economics and FinanceComputingMilieux_MISCELLANEOUSdescription
What is the impact of labour market regulations as measured by the OECD indicator of employment protection legislation (EPL) on capital and skill composition? Precisely, this study investigates the effects of changes in EPL on changes in four types of capital and three components of labour skill. They include construction, non-ICT, ICT, and R&D capital components on the one hand, and low-, medium-, and highly-skilled labour on the other. Our analysis is grounded on a large country–industry panel dataset of fourteen OECD countries, and eighteen manufacturing and market service industries, from 1988 to 2007. It shows that strengthening EPL lowers ICT capital and, even more severely, R&D capital relative to non-ICT and construction capital; it also brings down low-skilled relative to highly-skilled workers’ employment. These results suggest that structural reforms for more labour flexibility could have a favourable impact on firms’ R&D investment and hiring of low-skilled workers.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2018-08-01 |