Employment Protection Legislation and Labour Income Shares in Europe

Authors

  • Philip Arestis University of Cambridge, Department of Land Economics, Cambridge, UK
  • Jesús Ferreiro University of the Basque Country UPV/EHU, Department of Applied Economics V, Bilbao, Spain
  • Carmen Gómez University of the Basque Country UPV/EHU, Department of Applied Economics V, Bilbao, Spain

DOI:

https://doi.org/10.2298/PAN2003291A

Keywords:

Employment protection legislation, Labour markets, Labour income share, Income distribution

Abstract

The paper analyses the determinant elements of the evolution of labour income share, measured by the size of compensation of employees as a percentage of GDP in twenty European economies. In doing so, special attention is paid to the impact of employment protection legislation. Our study’s results show that the evolution of labour income share is explained by the economic growth, the growth of employment and unemployment rates, and the growth of real wages. Regarding employment protection, only employment protection for temporary workers matters. Our results shows that stricter provisions on the use of fixed-term and temporary agency contracts have a positive impact on the growth of the labour shares.
Key words: Employment protection legislation, Labour markets, Labour income share, Income distribution.
JEL: C33, E24, E25, F66.

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Published

2020-06-23

How to Cite

Arestis, P., Ferreiro, J., & Gómez, C. (2020). Employment Protection Legislation and Labour Income Shares in Europe. Panoeconomicus, 67(3), 291–308. https://doi.org/10.2298/PAN2003291A

Issue

Vol. 67 No. 3 (2020): 16th International Conference Developments in Economic Theory and Policy, Bilbao (Spain) Vol 66 No 3 (2019)

Section

Original scientific paper