The economic effects of employment protection legislation

In its mid-term budget session in April, the Government decided to implement two reforms concerning the Employment Contracts Act. One concerned the conditions for concluding fixed-term contracts, and the other concerned the easing of individual dismissal grounds for employees in permanent employment in firms employing fewer than 20 employees. Of these proposed reforms, only the reform concerning employment protection proceeded to further preparation.

This article is largely based on our expert statements (Kauhanen 2018a; Kauhanen 2018b), which we submitted to the Ministry of Economic Affairs and Employment regarding the boundary conditions of the employment protection reform, drawing on both theoretical and empirical research literature on the topic. The article reviews, based on the research literature, key findings on the effects of employment protection on employment, including effects on hiring, as well as on wages and productivity. (AI translation)

Publication Information

Kauhanen, M. & Kauhanen, A. (2018), Irtisanomissuojan taloudelliset vaikutukset, Työpoliittinen aikakauskirja, 61(4), 11–20.

• ISSN: 1797-5085