employment protection legislation, labour market dynamics, labour market segmentation


The paper examines the effects of the 2013 labour market reform in Slovenia which made permanent contracts less restrictive and fixed-term contracts more restrictive. Using matched employer-employee data, the differences in the outcomes for workers employed under permanent vs. fixed-term contracts before and after the legislative change are compared. The results show that the reform was successful in both reducing labour market segmentation and improving access to jobs for vulnerable groups: (i) it increased the probability of accessing permanent jobs via transitions from both fixed-term jobs and unemployment, and (ii) it improved the accessibility of permanent jobs for both young and older workers.