The Labor Market Effects of Financial Crises : The Role of Temporary Contracts in Central and Western Europe
This paper examines how the 2008-09 financial crisis affected labor markets in Central and Western Europe, and how this impact depended on employment protections laws. Using a differences-in-differences approach that compares industries with varyin...
| Main Authors: | , |
|---|---|
| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/213351496673003121/The-labor-market-effects-of-financial-crises-the-role-of-temporary-contracts-in-central-and-western-Europe http://hdl.handle.net/10986/27284 |
| Summary: | This paper examines how the 2008-09
financial crisis affected labor markets in Central and
Western Europe, and how this impact depended on employment
protections laws. Using a differences-in-differences
approach that compares industries with varying degrees of
inherent dependence on external financing, the analysis
finds that the crisis had significant negative impacts on
employment, particularly on temporary, less skilled, and
younger workers. These impacts on the level and composition
of employment were significantly stronger in countries with
stronger legal protection of permanent workers from
dismissal. This finding suggests that, given regulatory
inflexibility in adjusting the permanent workforce, firms
responded to tightening financial constraints by
disproportionately laying off temporary workers (who tend to
be younger and less skilled than permanent workers). |
|---|