Labour shares and employment protection in European economies, di Mirella Damiani , Fabrizio Pompei and Andrea Ricci (SIE 2013)
Liberalisation of temporary contracts has become an important component of recent
labour reforms but up to now available research has not paid attention to the impacts of these
institutional changes on functional income distribution. The present paper intends to fill this gap
by focussing on the effects of the reduction in strictness of employment protection of temporary
jobs on factor shares. By considering country-sector evidence for 14 EU economies and the
period 1995-2007, we obtain that these legislative changes caused a decrease in income share
accruing to workers.
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