ILPC 2027

Inequalities on the labour market between low- and highly-skilled individuals have increased within the last decades. Structural change, technological progress and globalization have altered labour markets significantly. Employment Protection Legislation (EPL) has often been discussed as an additional employment barrier due to the increase in labour costs and restrictions of the flexibility to adapt to economical changes. However, EPL might also reduce unemployment risks by extending those job relations that have already been established. On the basis of longitudinal EU-SILC data, capturing the waves 2005-2007, the role of EPL on individual unemployment dynamics is highlighted in this paper. As method, multilevel Poisson regression was applied. Due to theoretical considerations, the low-skilled are expected to show the highest number of unemployment periods, when being confronted with flexible dismissal rules, especially in technologically high developed countries. However, results are surprising: Unemployment is most dynamic for the highly-skilled, the more rigid EPL is!