Employment Protection Legislation and Labor Market Outcomes : Theory, Evidence and Lessons for Croatia

In response to prolonged recession, in April 2010 the Croatian Government adopted an Economic Recovery Program to safeguard macroeconomic stability and support faster recovery of the private sector. A central element of the program is revision of labor regulations to create a more dynamic labor market by ensuring labor force flexibility and job security. The goal is to increase the labor force participation rate and ensure that it has the skills and competencies required by the evolving and dynamic private sector. The Croatian Ministries of Finance and labor asked the World Bank for support in design of possible labor legislation reform. The objective of this note is to benchmark Croatia's legislation and help identify legal constraints on achieving a more dynamic and flexible labor market. Changes to employment protection legislation (EPL) can be politically difficult. They therefore need to be preceded by a public information campaign explaining their rationale and by dialogue with social partners. The central message to be conveyed to the public is that relaxing the most rigid provisions of the labor law will eventually lead to better employment prospects, shorter spells of unemployment, less informality, and higher productivity and ultimately incomes. This involves moving from protecting jobs to protecting workers an idea known as flexicurity.

Bibliographic Details

Main Author:	World Bank
Language:	English en_US
Published:	Washington, DC 2011-07
Subjects:	ACTIVE LABOR, ACTIVE LABOR MARKET, ACTIVE LABOR MARKET POLICIES, AGGREGATE EMPLOYMENT, AGGREGATE UNEMPLOYMENT, ANNUAL LEAVE, AVERAGE WAGE, BARGAINING POWER, BUSINESS CYCLE, COLLECTIVE AGREEMENT, COLLECTIVE AGREEMENTS, COLLECTIVE BARGAINING, COLLECTIVE BARGAINING AGREEMENTS, COLLECTIVE DISMISSAL, COLLECTIVE DISMISSALS, COMPENSATION PACKAGE, COMPETITIVENESS, CONDITIONS OF EMPLOYMENT, CONTINGENT WORKERS, DISADVANTAGED GROUPS, DISADVANTAGED WORKER, DISADVANTAGED WORKERS, DISCUSSIONS, DISMISSAL, DISMISSED WORKER, DISMISSED WORKERS, ECONOMIC CONDITIONS, ECONOMIC EFFECTS, ECONOMIC GROWTH, ECONOMIC RECOVERY, ECONOMIC THEORY, EFFICIENCY WAGES, EMERGING MARKET, EMPLOYEE, EMPLOYERS, EMPLOYMENT, EMPLOYMENT CONTRACTS, EMPLOYMENT DYNAMICS, EMPLOYMENT GROWTH, EMPLOYMENT LEVEL, EMPLOYMENT OFFICES, EMPLOYMENT OUTCOMES, EMPLOYMENT OUTLOOK, EMPLOYMENT PROSPECTS, EMPLOYMENT PROTECTION LEGISLATION, EMPLOYMENT RATE, EMPLOYMENT RATES, EMPLOYMENT STABILITY, FEMALE EMPLOYMENT, FIRING, FIRING COSTS, FIRM ENTRY, FIRM LEVEL, HIRING, INDEXATION, INDUSTRIAL RELATIONS, INEXPERIENCED WORKERS, INFLATION, INFLEXIBLE LABOR, INFORMAL EMPLOYMENT, INFORMAL SECTOR, INNOVATION, JOB CREATION, JOB DESTRUCTION, JOB LOSSES, JOB OPENINGS, JOB SEARCH, JOB SECURITY, JOB SEEKERS, JOBS, LABOR COSTS, LABOR DEMAND, LABOR ECONOMICS, LABOR FORCE, LABOR FORCE PARTICIPATION, LABOR LAW, LABOR LAWS, LABOR LEGISLATION, LABOR MARKET, LABOR MARKET FLEXIBILITY, LABOR MARKET INDICATORS, LABOR MARKET INSTITUTIONS, LABOR MARKET OUTCOMES, LABOR MARKET PERFORMANCE, LABOR MARKET POLICIES, LABOR MARKET REFORMS, LABOR MARKET REGULATIONS, LABOR MARKET RIGIDITIES, LABOR MARKET RIGIDITY, LABOR MARKET SEGMENTATION, LABOR MARKET SITUATION, LABOR MARKETS, LABOR PRODUCTIVITY, LABOR PRODUCTIVITY GROWTH, LABOR REGULATIONS, LABOR RELATIONS, LABOR RESOURCES, LABOUR, LABOUR MARKET, LABOUR MARKET OUTCOMES, LABOUR MARKET POLICIES, LABOUR MARKET REFORMS, LONG TERM UNEMPLOYMENT, LONG-TERM UNEMPLOYMENT, LONGTERM UNEMPLOYMENT, MANDATORY SEVERANCE, MANDATORY SEVERANCE PAY, MARKET VOLATILITY, MASS LAYOFFS, MINIMUM WAGE, OLDER WORKERS, ON-THE-JOB TRAINING, PAYROLL TAXES, PERMANENT EMPLOYMENT, PRIVATE SECTOR, PRODUCTIVE FIRMS, PRODUCTIVITY GROWTH, PROTECTING WORKERS, PUBLIC SECTOR WORKERS, REAL WAGES, RECOMMENDATIONS, REDUNDANCY, REDUNDANT WORKERS, REGULAR CONTRACTS, REGULAR JOBS, REGULAR WORKERS, RIGID LABOR MARKET, RIGID WAGES, SEASONAL FLUCTUATIONS, SEVERANCE PAYMENTS, SICK LEAVE, SKILLED WORKERS, SOCIAL PROTECTION, SOCIAL SECURITY, STAFF, SUBSTITUTE, TEMPORARY EMPLOYMENT, TEMPORARY WORK, TEMPORARY WORKERS, TOTAL FACTOR PRODUCTIVITY, TRADE UNIONS, TRIPARTITE, UNEMPLOYED, UNEMPLOYMENT, UNEMPLOYMENT INSURANCE, UNEMPLOYMENT INSURANCE FUND, UNEMPLOYMENT RATE, UNEMPLOYMENT SPELLS, UNINTENDED EFFECTS, UNION ACTIVITY, UNION DENSITY, UNION MEMBERSHIP, WAGE BARGAINING, WAGE BARGAINING SYSTEM, WAGE BILL, WAGE DETERMINATION, WAGE GROWTH, WAGE RIGIDITIES, WAGE STRUCTURE, WORKER RIGHTS, WORKING CONDITIONS, WORKING HOURS, YOUNG WORKERS, YOUTH EMPLOYMENT, YOUTH UNEMPLOYMENT,
Online Access:	http://documents.worldbank.org/curated/en/2011/07/16406294/employment-protection-legislation-labor-market-outcomes-theory-evidence-lessons-croatia https://hdl.handle.net/10986/12902
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