This paper tests whether the job security offered by stricter employment protection legislation (EPL) undermines positive compensating wage differentials that would otherwise be paid. Specifically, we ask whether industries with relatively more need for layoffs and labour flexibility have lower...

According to the National Household Survey (ENAHO), approximately three out of four employment relationships within the formal sector of the Peruvian economy are based on temporary contracts. This percentage is larger than that of any OECD country and also considerably larger to that of any...