Strict job laws ‘slow economic recovery’

Strict job protection laws make it harder for countries to emerge from economic crises, according to a study presented in Stockholm on Monday.

The study, based on a number of research findings, claims that countries with the strictest job protection laws find it hardest to adapt after shocks to the economy. These countries’ ability to adapt is reduced by one third compared to countries with looser rules. In addition, productivity growth falls by around 1 percent.

The researchers studied data from 60 countries, and took account not only of the laws themselves, but also of how strictly they were applied.

The degree of job protection provided in Sweden puts it roughly half-way down a league table of the countries in the study. However, application of the rules in Sweden was seen as comparatively strict.

The study was carried out by an international research team and presented at a seminar held by the Confederation of Swedish Enterprise.