Firms' Adjustments to Employment Protection Legislation

Evidence from South Korea

Datos Bibliográficos

ID3375463
AutoresJisun Baek (0000-0002-3661-3162), Wansoo Park (0000-0002-3770-7398, Korea Development Institute, autor de correspondencia), Wooram Park (Jisun Baek is an Assistant Professor at the Korea Development Institute (KDI) School of Public Policy and Management. WooRam Park is an Associate Fellow at the KDI.)
Año2018
Volumen71
Número3
Páginas733-759
Fecha de publicación2018-05-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaIndustrial and Labor Relations Review (JOURNAL)
Identificadores de la revistaISSN: 0019-7939 • E-ISSN: 2162-271X
EditorialSAGE Publications Inc (PUBLISHER)
DOI10.1177/0019793917728720
OpenAlexW2751262981
IdiomaEN
Citas recibidas3
Referencias citadas24

The authors examine the impact of employment protection legislation on firm-level outcomes such as employment and profitability in South Korea. The 2007 Act on the Protection of Temporary Workers restricted the use of specific types of temporary contracts to a period of two years. Exploiting the fact that the impact of the reforms was greater for establishments that intensively used the affected temporary workers, the authors apply a difference-in-differences framework. Their results show that businesses responded to the Act by reducing the use of temporary contracts protected by the reforms and partially substituting them with permanent and other unprotected temporary contracts. As a result, the reform decreased overall employment level of establishments. Furthermore, the authors find that the newly introduced regulations had a limited negative impact on firms' profitability. Evidence suggests that establishments also improved their capital intensity and their labor productivity in response to the labor reform

Business · Capital (architecture) · Difference in differences · Economic growth · Economics · Employment protection legislation · Labour economics · Legislation · Political science · Productivity · Profitability index · Unemployment · Finance · Firm Innovation and Growth · Labor market dynamics and wage inequality · Labor Movements and Unions