Europe’s weak employment performance is often attributed to strict employment protection legislation (EPL). Several governments have therefore tried, albeit with varied success, to liberalise their employment laws in order to meet the Lisbon employment targets. This project examines such efforts in the EU’s new member states and accession countries from Central and Eastern Europe (CEEC10). The aim is to understand not only the causes of national variation in EPL strictness and their consequences for employment, but also the dynamics of EPL reforms over time and conditions that make these politically difficult reforms viable. To this end, the project will develop a comparative database of EPL reforms documenting annual changes in employment protection since 1990, and political and economic factors associated with these reforms. To examine whether there may be more than one recipe for good/bad employment performance, statistical analysis and standard regression techniques will be combined with state-of-the-art qualitative methods in the form of crisp-set and fuzzy-set Qualitative Comparative Analysis (QCA). By recognising that poor employment performance may not have the same causes in all countries, this analysis may provide evidence against one-size-fits-all policy recommendations, which often wrongly assume that what works in one country will work everywhere.

The project has resulted in two new databases. The first one contains annual series of the EPL index (a measure of strictness of employment protection legislation) in 10 CEECs during 1990-2009. The calculation of the index follows the methodology employed by the OECD for measuring EPL strictness. As such, these data are directly comparable to available data on EPL strictness for OECD economies. The index is based on information gathered through standard questionnaires completed by teams of national experts that include 18 questions regarding the rules governing employment on regular contracts, temporary contracts and collective dismissals. The second database provides qualitative information in the form of short summaries of all EPL reforms in CEECs during 1990-2009. The reforms are classified according to their direction and scope. This database was constructed on the basis of national laws, secondary sources and questionnaires sent to teams of national experts, and it follows the methodology used by the IZA-FRdB Social Reforms Database. As such, these data are comparable to data for Western Europe made available by IZA-FRdB database.