Electoral Competition and the Partisan Politics of Employment Protection Legislation

Employment Protection Legislation (EPL) is a key aspect of the regulatory welfare state. It has substantial implications for employers and employees and receives considerable attention in the political and electoral arena. While EPL has been extended until the mid-1980s, it has been liberalized in many countries since then – just like other areas of the welfare state. Interestingly, the quantitative literature analyzing EPL reforms has not yet taken up the Piersonian argument that retrenchment should be unpopular among the voters, which in turn should affect the partisan politics of EPL reform. In the paper, we test whether electoral competition conditions partisan effects in the area of EPL. On the one hand, we test whether the composition of a party’s electorate affects the EPL reforms that party adopts; on the other hand, we investigate whether the partisan politics of EPL reform are affected by how much emphasis other parties put on issues of the welfare state. We do so by analyzing EPL in 21 established democracies since 1985.