Titelaufnahme

This article focuses on the relationship between employment protection legislation (EPL) and skill-specific unemployment risks. It is expected that this relationship is moderated by the level of technological progress, which is linked to the specific requirements of functional and numeric flexibility. The analysis is based on data from the Labour Force Survey from the year 2008. The results show that EPL is positively related to unemployment risks for all skill groups. However, for the medium- and highly skilled, the effects are moderated by the level of technological progress: the higher the share of employment in (medium-) high-tech manufacturing and knowledge-intensive services, the lower this relation will be. In countries with very large employment shares in both sectors, the relationship between EPL and unemployment can even be negative. One striking result of the analysis is that there is no robust relationship between EPL and the risk of long-term unemployment.