design: impulsant
Wednesday, April 27, 2005

Interesting research

Two researchers of the TU Delft recently discovered that a flexible "employee market", like America and Canada have, where it's easy to fire people, isn't good for economic growth. The current ideas are that you will sooner hire someone if it's easier to fire them again and because of that, your company will grow faster.

However, this study shows that countries with lots of employee protection sustain a larger growth then those who do not. There are two reasons for this.
1) Employees are more eager to share knowledge when they have job security.
2) You need less managers to keep them in line (about 50% less).

I still wonder how the research can have these results, looking at the economic growth of the USA and Canada vs Europe. The idea however is... Interesting.


  • I think the main reason why USA and UK grows more is that companies hire people since they can get rid of in times of troubles. This is not the case in countries like Germany or France. So the study may be right from an employee perspective but not from the company view.

    By Blogger Rolf, at 5:51 pm  

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