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N. Siassi:
"From Dual to Unified Employment Protection: Transition and Steady State";
Talk: ECON Research Seminar, TU Wien, Austria (invited); 2019-11-20.

We develop a computationally tractable model to study the allocational and distributional consequences of replacing a highly dual employment protection legislation (EPL) system with a unified EPL scheme. To illustrate our approach, we specialise the discussion to Spain - a country considered as an epitome of a labour market with dual EPL. First, we show that introducing a unified EPL scheme reduces unemployment and worker turnover at short job tenures. However, these changes are quantitatively limited as most of the adjustments occur through a change in bargained wages. Second, as a consequence, the policy reform has very heterogeneous effects on the lifetime value and on the volatility of labour income. The results support the view that replacing dual EPL with a unified scheme creates winners and losers among workers who are employed when the reform is implemented.