Employment securities effect on unemployment : A study about the effect of employment securities on unemployment in the OECD countries

University essay from Umeå universitet/Nationalekonomi

Author: Klara Pettersson; [2019]

Keywords: ;

Abstract: This thesis examines how employment security, that is employment protection legislation, unemployment benefit and trade union density, affects unemployment in the OECD countries. The theoretical framework suggests that employment protection can have both positive and negative effects on unemployment depending on whether the effect of job destruction or job creation is larger. By using two fixed effects models with different measurements of unemployment as dependent variables, the result show that employment protection legislation decreases unemployment while trade union density increases unemployment. However, unemployment benefits do not show any significant effect on unemployment. The results are not in line with the features of the increasingly used flexicurity model, that is possibly because flexicurity may not be applicable in all countries due to differences in labour market structures and cultural differences.

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