IESET.
Hypotheses·growth·labour_flexibility_security_complement

Labour-market flexibility (ease of hiring and firing, low EPL, decentralised wage bargaining) improves long-run employment rates, productivity growth, and GDP per capita only when paired with complementary adjustment institutions: active labour-market policy (retraining, job search assistance), relocation support, or income-smoothing mechanisms (unemployment insurance, portable benefits).

Flexibility without security produces transient employment gains but no durable prosperity advantage over rigid but secure regimes, in OECD and middle-income panels 1980-2020.

PARTIALengine/runs/labour_flexibility_security_complement

PARTIAL — coef=+1.306e-16, p=0.339; effect magnitude effectively zero

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

The evidence is suggestive but not decisive. coef=+1.306e-16, p=0.339; effect magnitude effectively zero

why it matters

Growth claims can look convincing in single success stories. This test asks whether the pattern survives a broader comparison.

how the test works

It compares 33 country or place units from 1980 to 2020, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Employment protection legislation index
  • Active labour market policy spending
What we checked
  • Employment rate 15 64
  • Productivity growth
  • Real income per capita growth
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/labour_flexibility_security_complement
1007550250198020002020USAGBRDEUFRAITAESPNLD
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show employment_rate_15_64 across 33 sampled countries over 1980–2020.
The shapes above are stylised — none of the lines are real data.
Placeholder for labour_flexibility_security_complement. Published chart will be generated from engine/runs/labour_flexibility_security_complement/chart_data.json.

Who has skin in the game — schools predicting on this

8 schools list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Austrian Business Cycle Theory (ABCT)wins if MIXEDpartial/no-callChicago School Monetarismwins if MIXEDpartial/no-callClassical Liberalwins if MIXEDpartial/no-callEmpirical Pragmatist (the framework's house position)wins if SUPPORTEDpartial/no-callNew Institutional Economicswins if SUPPORTEDpartial/no-callNew Keynesian (mainstream synthesis)wins if SUPPORTEDpartial/no-callOrdoliberalism (Freiburg School)wins if SUPPORTEDpartial/no-callSocial Democraticwins if SUPPORTEDpartial/no-call

Pre-registration

pre-registered
first-spec commit 5ce4495 · 2026-05-02T19:11:20Z
run generated · 2026-06-29T17:52:53Z

Labour-market flexibility (ease of hiring and firing, low EPL, decentralised wage bargaining) improves long-run employment rates, productivity growth, and GDP per capita only when paired with complementary adjustment institutions: active labour-market policy (retraining, job search assistance), relocation support, or income-smoothing mechanisms (unemployment insurance, portable benefits). Flexibility without security produces transient employment gains but no durable prosperity advantage over rigid but secure regimes, in OECD and middle-income panels 1980-2020.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

The hypothesis is falsified if labour-market flexibility alone (low EPL) has a positive and significant (p < 0.10) association with employment and productivity growth without interaction with ALMP or UI, or if the flexibility-security interaction is negative and significant.

formal test & threshold
test:      panel_fe_flexibility_security_complement_1980_2020
threshold: [object Object]

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
33 countries · 1980 – 2020
Evidence type
associational

Data

VariableSourceTransform
employment_rate_15_64
outcome
oecd:OECD.ELS.SAEtier 2
level
tfp_growth
outcome
pwt:rtfpnatier 3
log_diff_5y
real_gdp_per_capita_growth
outcome
world_bank_wdi:NY.GDP.PCAP.KD.ZGtier 2
level
employment_protection_legislation_index
treatment
oecd:OECD.ELS.EPLtier 2
level
active_labour_market_policy_spending
treatment
oecd:OECD.ELS.SAEtier 2
level
unemployment_insurance_replacement_rate
treatment
oecd:OECD.ELS.SAEtier 2
level
log_gdp_per_capita
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
human_capital_index
control
pwt:hctier 3
level
union_density
control
ilostat:union_density_ratetier 2
level
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — labour_flexibility_security_complement

Verdict: PARTIAL — coef=+1.306e-16, p=0.339; effect magnitude effectively zero

Pre-registration

  • Claim: Labour-market flexibility (ease of hiring and firing, low EPL, decentralised wage bargaining) improves long-run employment rates, productivity growth, and GDP per capita only when paired with complementary adjustment institutions: active labour-market policy (retraining, job search assistance), relocation support, or income-smoothing mechanisms (unemployment insurance, portable benefits). Flexibility without security produces transient employment gains but no durable prosperity advantage over rigid but secure regimes, in OECD and middle-income panels 1980-2020.
  • Falsification rule: The hypothesis is falsified if labour-market flexibility alone (low EPL) has a positive and significant (p < 0.10) association with employment and productivity growth without interaction with ALMP or UI, or if the flexibility-security interaction is negative and significant.
  • Falsification test: panel_fe_flexibility_security_complement_1980_2020

Estimate

  • Method: statsmodels OLS FE fallback (linearmodels failed: exog does not have full column rank. If you wish to proceed with model estimation irrespective of the numerical accuracy of coefficient estimates, you can set check_rank=False.)
  • Coefficient (treatment): +1.306e-16
  • Std error: 1.365e-16
  • p-value: 0.339
  • Observations: 858, countries: 28
  • Within R²: 1
  • Fixed effects: entity=True, time=True
  • Clustering: country

Variables resolved

  • oecd:OECD.ELS.SAE → employment_rate_15_64 (outcome, publisher=oecd, n=1825)
  • pwt:rtfpna → tfp_growth (outcome, publisher=pwt, n=6407)
  • world_bank_wdi:NY.GDP.PCAP.KD.ZG → real_gdp_per_capita_growth (outcome, publisher=world_bank_wdi, n=13897)
  • oecd:OECD.ELS.SAE → active_labour_market_policy_spending (treatment, publisher=oecd, n=1825)
  • oecd:OECD.ELS.SAE → unemployment_insurance_replacement_rate (treatment, publisher=oecd, n=1825)
  • world_bank_wdi:NY.GDP.PCAP.KD → log_gdp_per_capita (controls, publisher=world_bank_wdi, n=12104)
  • pwt:hc → human_capital_index (controls, publisher=pwt, n=8637)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)

Variables missing data

  • oecd:OECD.ELS.EPL (treatment, name=employment_protection_legislation_index) — vintage not on disk
  • ilostat:union_density_rate (controls, name=union_density) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:52:53+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Authored framework. Read the transparency note.