The Political Economy of Two-tier Reforms of Employment Protection in Europe

Reforms of employment protection (EPL) in Europe eased the recourse to temporary forms of employment while not reducing the strictness of EPL of permanent jobs (with the exception of Spain). Since 1990, such two-tier reforms have been implemented in Belgium, Denmark, Germany, Greece, Italy, the Netherlands and Sweden. The paper seeks to show why two-tier reforms of EPL have taken place in some countries and have failed on other occasions. This is done by having a loser look at the history of national reform processes. In addition the paper seeks to determine whether two-tier reforms later led to EPL reforms for permanent jobs.