The Only Way is Up?: Employment Protection and Job Mobility among Recent Entrants to European Labour Markets

This paper addresses the effects of employment protection legislation on job mobility and status attainment among young people entering the labour market. Since strict employment protection legislation (EPL) reduces labour market turnover and results in low vacancy levels, the paper argues that stringent EPL reduces market entrants' chances of both job and upward status mobility, and thus Xattens observed status-experience profiles. Labour Force Survey data for 11 European countries support these assertions: estimates from multilevel continuous state space hazard models show both job and status mobility to be negatively related to strict employment protection legislation. Hence, any positive EPL eVects from the higher stability of young peoples' initial jobs are dominated by the system-level effect of strict EPL reducing opportunity levels in external labour markets. Upward mobility chances are found to be markedly reduced in the high-skill segment of the labour market and among market entrants in unfavourable initial job matches. In total, cross-national variation in EPL strictness is estimated to account for about one-third of cross-national differences in mobility rates and even 50% of cross-national differences in terms of status returns to job mobility.