Employment Protection Legislations and Economic Performance: Empirical Evidence from Canada

Jonathan Deslauriers (HEC Montréal)
Benoit Dostie (HEC Montréal)
Robert Gagné (HEC Montréal)

Abstract: In this paper, we exploit the fact that the labour markets in Canada are a provincial jusrisdiction. We have carefully documented seven legal instruments related to employment protection at the provincial level. Among these seven instruments, four are related to job security and three to working time regulations. The legal instruments are included in an econometric specification which is allowing for homogenous but unobservable macroeconomic shocks. The model is estimated on provincial panel data from 1976 to 2008 (330 observations). The results clearly indicate that several legal instruments have a significant impact on three economic performance variables: employment, work intensity and labour productivity.

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