Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/109082
Authors: 
Bjuggren, Carl Magnus
Year of Publication: 
2015
Series/Report no.: 
IFN Working Paper 1061
Abstract: 
The theoretical predictions of how employment protection affects firm productivity are ambiguous. In this paper I study the effect of employment protection rules on labor productivity using micro data on Swedish firms. A reform of the employment protection rules in 2001 made it possible for small firms with less than eleven employees to exempt two workers from the seniority rules. I exploit the reform as a natural experiment. My results indicate that increased labor market flexibility increases labor productivity. The increase appears to be driven mainly by the older and the smallest firms. It is not explained by capital intensity or the educational level of workers.
Subjects: 
Employment Protection
Labor Market Regulations
Labor Productivity
Last-in-First-out Rules
JEL: 
D22
J23
J24
J32
J38
K31
M51
Document Type: 
Working Paper

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