The impact of temporary employment and employment protection on labour productivity: evidence from an industry-level panel of EU countries

Journal for Labour Market Research

Table 4 Labour productivity (with BI2)

	(1) POLS	(2) FD	(3) FE	(4) IV-FD	(5) IV-FE^b
EPL	0.002	0.002	0.002	0.004	0.006
EPL	(0.001)^**	(0.002)^*	(0.001)^*	(0.003)	(0.002)^***
EPL*BI2	−0.001	−0.001	−0.002	−0.001	−0.001
EPL*BI2	(0.000)^*	(0.001)	(0.001)^**	(0.001)	(0.001)^*
TE	−0.098	−0.119	−0.080	−0.203	−0.263
TE	(0.007)^***	(0.017)^***	(0.009)^***	(0.115)^*	(0.071)^***
TUD	−0.001	−0.001	−0.001	−0.001	−0.001
TUD	(0.000)^***	(0.000)	(0.000)	(0.000)	(0.000)^*
Trend	0.028		0.352		0.032
Trend	(0.002)^***		(0.004)^***		(0.027)
Constant	4.521	0.021		0.027
Constant	(0.006)^***	(0.006)^***		(0.011)^**
Sector dummies	NO	NO	YES	NO	YES
Country dummies	NO	NO	YES	NO	YES
Year dummies	NO	YES	YES	YES	YES
Endogeneity Test^a				p-val=0.451	p-val=0.003
Observations	1820	1690	1820	1690	1820
R-squared	0.3056	0.1496	0.9993	0.1381	0.9991

POLS: pooled ordinary least squares; FD: first difference; FE: fixed effects (dummy variable regression); IV: instrumental variables (two stage least squares); EPL: employment protection legislation; BI1: binary indicator 1; TE: the share of temporary employment; TUD: trade union density
HAC Robust standard errors in brackets. ^*significant at 10 %, ^**significant at 5 %, ^***significant at 1 %
^aThe endogeneity test is the difference of two Sargan-Hansen statistics: one for the equation with the smaller set of instruments and one for the equation with the larger set of instruments. Unlike the Hausman tests, this statistic is robust to heteroskedasticity and serial correlation. ^bFirst-stage estimates reported in Table 11