Employment protection legislation and firm growth : evidence from a natural experiment

• A Swedish reform in 2001 made it possible for firms with less than 11 employees to exclude two from the last-in-first-out principle in case of layoffs. The reform increased employment growth with over 4000 additional jobs per year among firms with five to nine employees. Firms with 10 employees became 3.4 percentage points less likely to increase their workforce, indicating that the introduced threshold kept them from growing. Thus, employment protection legislation seems to act as a growth barrier for small firms.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

Economics

Nationalekonomi

Complex Systems – Microdata Analysis

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