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This article interprets literature examining union effects on economic performance. Production function studies indicate small overall union impacts on productivity; positive effects, where they exist, appear to result from management response to decreased profit expectations and from a natural selection process. Lower profitability among unionized firms is well established; more interesting is the possibility that unions appropriate quasi rents deriving from long-lived tangible and intangible capital. The connection between unions, investment behavior, and productivity growth emerges as a particularly fruitful line of empirical inquiry, although it does not encourage a sanguine view of unionism's long-run impact.

Using special CPS data on displaced workers, this article investigates the wage consequences of job displacement in a framework that emphasizes the effects of past job duration(s) and unemployment duration(s) on postdisplacement wages. Our model also attempts to take account of the simultaneity between unemployment duration and the postdisplacement wage. It is found that duration strongly reduces subsequent earnings and that considerable overstatement of the loss in firm-specific training investments is implied by conventional routes to measuring wage losses.

In this paper we investigate the process of job search, using a unique, large-scale data set for Portugal that allows us to assess the effect of job search methods on escape rates from unemployment and, in a new departure, the impact of job-finding methods used by the unemployed on earnings. In each case, the characteristics of workers receive careful attention. In addition, the effectiveness of the job search process is evaluated in terms of the periodicity of the resulting job match. Some emphasis is accorded the role of the public employment agency which, despite its frequency as a search vehicle, is found to have a low hit rate and to lead to low-paying jobs. Such jobs are also shorter lasting, only partly because they are more likely to be of a fixed-term nature. The policy backdrop is provided by the "employment chapter" of the Treaty of Amsterdam. Given our results, some concern naturally arises as to the capacity of the public employment agency to meet the targets set under European employment initiatives.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in The Economics of Employment ProtectionJohn T. Addison Paulino Teixeira The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent, nonprofit limited liability company (Gesellschaft mit beschränkter Haftung) supported by the Deutsche Post AG. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. The current research program deals with (1) mobility and flexibility of labor markets, (2) internationalization of labor markets and European integration, (3) the welfare state and labor markets, (4) labor markets in transition, (5) the future of work, (6) project evaluation and (7) general labor economics. D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. ABSTRACT The Economics of Employment ProtectionEmpirical investigation of the labor market consequences of employment protection has mushroomed since Lazear's (1990) pioneering study. Having sketched the theoretical background, we chart the course of the modern empirical literature. We focus mainly on dismissals protection, distinguishing between the themes of employment and unemployment development and labor market dynamics proper. Our discussion of employment and unemployment largely deals with the effect of employment protection on levels of these outcome indicators. We distinguish between overall and compositional effects (e.g., by demographic group and type of contract), between developing and industrialized nations, and identify some key control variables. Our discussion of labor market dynamics focuses on the speed of adjustment issue and on gross flows. It also formalizes the link between analyses of levels and changes in variables. At all times potential offsets to the adverse effects of employment protection receive consideration.