Employment Protection Legislation and Labor Market Outcomes : Theory, Evidence and Lessons for Croatia
In response to prolonged recession, in April 2010 the Croatian Government adopted an Economic Recovery Program to safeguard macroeconomic stability and support faster recovery of the private sector. A central element of the program is revision of l...
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| Format: | Policy Note |
| Language: | English en_US |
| Published: |
Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2011/07/16406294/employment-protection-legislation-labor-market-outcomes-theory-evidence-lessons-croatia http://hdl.handle.net/10986/12902 |
| Summary: | In response to prolonged recession, in
April 2010 the Croatian Government adopted an Economic
Recovery Program to safeguard macroeconomic stability and
support faster recovery of the private sector. A central
element of the program is revision of labor regulations to
create a more dynamic labor market by ensuring labor force
flexibility and job security. The goal is to increase the
labor force participation rate and ensure that it has the
skills and competencies required by the evolving and dynamic
private sector. The Croatian Ministries of Finance and labor
asked the World Bank for support in design of possible labor
legislation reform. The objective of this note is to
benchmark Croatia's legislation and help identify legal
constraints on achieving a more dynamic and flexible labor
market. Changes to employment protection legislation (EPL)
can be politically difficult. They therefore need to be
preceded by a public information campaign explaining their
rationale and by dialogue with social partners. The central
message to be conveyed to the public is that relaxing the
most rigid provisions of the labor law will eventually lead
to better employment prospects, shorter spells of
unemployment, less informality, and higher productivity and
ultimately incomes. This involves moving from protecting
jobs to protecting workers an idea known as flexicurity. |
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