engleski

Employment protection reforms and labour market outcomes in the aftermath of the recession: Evidence from Croatia

This paper examines the effects of employment protection legislation (EPL) reforms on employment outcomes in Croatia, testing the available theoretical predictions of partial labour market reforms from the literature. With a push from the EU accession, the reforms liberalised employment protection provisions for both temporary (2013) and permanent (2014) contracts at the end of six-year-long recession thus presenting a distinctive case for policy evaluation. Using Labour Force Survey (LFS) data in the period 2007-2017 and applying event study method in combination with probit regressions, main results suggest that EPL reforms from 2013 and 2014 induced a rise in temporary employment, while the effects on overall employment are clearly visible only in the case of the second reform. Moreover, probit regression estimations show that specific groups of the population— females, youths, foreigners, low-skilled and singles from rural areas—have a higher probability to end up with temporary contracts, suggesting there is segmentation on the Croatian labour market.

employment protection ; reform ; recession ; temporary employment ; policy evaluation ; Croatia

The article was judged the best paper in the regular category in the annual competition for the Prof. Dr. Marijan Hanžeković Prize for 2019.