IESET.
Hypotheses·labour·labour_market_flexibility_unemployment_duration

Countries with stricter employment protection legislation — measured by the OECD EPL indicator (or comparable alternatives where OECD EPL is missing) — experience longer average unemployment duration, holding other controls constant.

The hypothesis is consistent with the Mortensen-Pissarides search-and-matching framework: higher firing costs reduce both firing and hiring flows, lengthening the time unemployed workers spend searching for jobs. The effect on the unemployment LEVEL is theoretically ambiguous (lower inflows offsetting longer durations) and is NOT part of the pre-registered claim; only the duration effect is. Expected effect is sign-definite (positive correlation between EPL strictness and duration) with magnitude consistent with the Nickell 1997, Blanchard-Wolfers 2000, and OECD Employment Outlook (2020+) ranges.

INCONCLUSIVEengine/runs/labour_market_flexibility_unemployment_duration

INCONCLUSIVE_DATA_PENDING — interaction term requested but no loadable constructed interaction variable is defined. The generic panel_fe runner would otherwise grade a main-effect coefficient instead of the pre-registered interaction estimand. Add a treatment or decomposition variable with transformation/source/name marking the interaction, or use a bespoke replication script.

confidence cueResult card produced; verdict unclassified.

policy briefCoverage too thin

In ordinary language

In plain terms, this asks whether rich-country employment protection rules strictness is actually linked to better or worse long term unemployment share from 1985 to 2023.

plain answer

This test cannot make a firm call yet. interaction term requested but no loadable constructed interaction variable is defined.

why it matters

Labor-market rules often help some workers while risking job loss or slower hiring for others. This test looks for that tradeoff in observable employment or unemployment data.

how the test works

It compares 31 country or place units from 1985 to 2023, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Rich-country employment protection rules strictness
What we checked
  • Long term unemployment share
  • Median unemployment duration
  • Unemployment to employment transition rate
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

6 input datasets, 0 unresolved missing series, provenance status: reproducible hash verified.

Results

engine/runs/labour_market_flexibility_unemployment_duration
1007550250198520042023AUTBELCANCHECZEDEUDNK
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show long_term_unemployment_share across 31 sampled countries over 1985–2023.
The shapes above are stylised — none of the lines are real data.
Placeholder for labour_market_flexibility_unemployment_duration. Published chart will be generated from engine/runs/labour_market_flexibility_unemployment_duration/chart_data.json.

Who has skin in the game — schools predicting on this

17 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 SUPPORTEDpartial/no-callChicago School Monetarismwins if SUPPORTEDpartial/no-callClassical Liberalwins if SUPPORTEDpartial/no-callDegrowth / Ecological Macroeconomicswins if REFUTEDpartial/no-callDemocratic Socialism (Bernsteinian revisionism + modern)wins if REFUTEDpartial/no-callStructuralist / Developmentalistwins if MIXEDpartial/no-callEco-Socialism / Red-Greenwins if REFUTEDpartial/no-callEmpirical Pragmatist (the framework's house position)wins if MIXEDpartial/no-callNew Institutional Economicswins if MIXEDpartial/no-callMarket Socialism (Lange-Lerner tradition)wins if REFUTEDpartial/no-callMarxian Political Economywins if REFUTEDpartial/no-callMarxism-Leninism (central-planning implementation)wins if REFUTEDpartial/no-callModern Monetary Theorywins if REFUTEDpartial/no-callNew Keynesian (mainstream synthesis)wins if MIXEDpartial/no-callOrdoliberalism (Freiburg School)wins if SUPPORTEDpartial/no-callPost-Keynesianwins if REFUTEDpartial/no-callSocial Democraticwins if REFUTEDpartial/no-call

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:53:42Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

Countries with stricter employment protection legislation — measured by the OECD EPL indicator (or comparable alternatives where OECD EPL is missing) — experience longer average unemployment duration, holding other controls constant. The hypothesis is consistent with the Mortensen-Pissarides search-and-matching framework: higher firing costs reduce both firing and hiring flows, lengthening the time unemployed workers spend searching for jobs. The effect on the unemployment LEVEL is theoretically ambiguous (lower inflows offsetting longer durations) and is NOT part of the pre-registered claim; only the duration effect is. Expected effect is sign-definite (positive correlation between EPL strictness and duration) with magnitude consistent with the Nickell 1997, Blanchard-Wolfers 2000, and OECD Employment Outlook (2020+) ranges.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if (a) the two-way FE panel coefficient on OECD EPL on long-term-unemployment share is not positive and significant at 5%, OR (b) the coefficient on median unemployment duration is not positive at 5%, OR (c) the coefficient loses significance when unemployment-benefit replacement rate is added as a control (suggesting the finding is confounded with UI generosity rather than identifying the EPL-specific effect). Support requires both outcomes to show the predicted sign AND for the EPL coefficient to remain significant after the UI generosity robustness control.

formal test & threshold
test:      two_outcome_direction_plus_ui_robustness
threshold: panel_FE_beta(EPL) on long_term_share > 0 at p<0.05 AND panel_FE_beta(EPL) on median_duration > 0 at p<0.05 AND EPL coefficient remains significant at p<0.10 after UI generosity control

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
31 countries · 1985 – 2023
Evidence type
associational

Two-way FE panel, standard errors clustered by country. Primary identification from within-country EPL changes over time (many OECD countries undertook EPL reforms — DEU 2003 Hartz, ESP 2012, ITA 2014 Jobs Act, FRA 2017 — providing useful within-country variation). Robustness: Blanchard-Wolfers 2000 style interaction of EPL with macro shock (output gap), since the theoretical prediction is EPL matters more when shocks are larger.

Data

VariableSourceTransform
long_term_unemployment_share
outcome
oecd:OECD.ELS.EMPtier 2
share_unemployed_12_months_or_more
median_unemployment_duration
outcome
oecd:OECD.ELS.EMPtier 2
level_months
unemployment_to_employment_transition_rate
outcome
ilostat:EMP_2EMP_SEX_AGE_NBtier 2
oecd:OECD.ELS.EMPtier 2
monthly_transition_rate_12mo_average
oecd_epl_strictness
treatment
oecd:DSD_EPLtier 2
level_index_0_to_6
unemployment_benefit_replacement_rate
control
oecd:OECD.ELS.SAEtier 2
level_pct
active_labour_market_spending
control
oecd:OECD.ELS.SOCtier 2
pct_of_gdp
unionisation_rate
control
oecd:OECD.ELS.SAEtier 2
ilostat:union_densitytier 2
level_pct
output_gap
control
oecd:OutputGaptier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — labour_market_flexibility_unemployment_duration

Verdict: INCONCLUSIVE_DATA_PENDING — interaction term requested but no loadable constructed interaction variable is defined. The generic panel_fe runner would otherwise grade a main-effect coefficient instead of the pre-registered interaction estimand. Add a treatment or decomposition variable with transformation/source/name marking the interaction, or use a bespoke replication script.

Pre-registration

  • Claim: Countries with stricter employment protection legislation — measured by the OECD EPL indicator (or comparable alternatives where OECD EPL is missing) — experience longer average unemployment duration, holding other controls constant. The hypothesis is consistent with the Mortensen-Pissarides search-and-matching framework: higher firing costs reduce both firing and hiring flows, lengthening the time unemployed workers spend searching for jobs. The effect on the unemployment LEVEL is theoretically ambiguous (lower inflows offsetting longer durations) and is NOT part of the pre-registered claim; only the duration effect is. Expected effect is sign-definite (positive correlation between EPL strictness and duration) with magnitude consistent with the Nickell 1997, Blanchard-Wolfers 2000, and OECD Employment Outlook (2020+) ranges.
  • Falsification rule: Not supported if (a) the two-way FE panel coefficient on OECD EPL on long-term-unemployment share is not positive and significant at 5%, OR (b) the coefficient on median unemployment duration is not positive at 5%, OR (c) the coefficient loses significance when unemployment-benefit replacement rate is added as a control (suggesting the finding is confounded with UI generosity rather than identifying the EPL-specific effect). Support requires both outcomes to show the predicted sign AND for the EPL coefficient to remain significant after the UI generosity robustness control.
  • Falsification test: two_outcome_direction_plus_ui_robustness

Estimate

  • Error: interaction term requested but no loadable constructed interaction variable is defined. The generic panel_fe runner would otherwise grade a main-effect coefficient instead of the pre-registered interaction estimand. Add a treatment or decomposition variable with transformation/source/name marking the interaction, or use a bespoke replication script.

Variables resolved

  • ilostat:EMP_2EMP_SEX_AGE_NB; oecd:OECD.ELS.EMP,DSD_LMS@DF_LMS,1.0 → unemployment_to_employment_transition_rate (outcome, publisher=ilostat, n=10188)
  • oecd:OECD.ELS.SOC,DSD_SOCX@DF_SOCX_ALMP,1.0 → active_labour_market_spending (controls, publisher=oecd, n=1649)
  • oecd:OECD.ELS.SAE,DSD_TU@DF_TU,1.0; ilostat:union_density → unionisation_rate (controls, publisher=oecd, n=1825)
  • oecd:OutputGap → output_gap (controls, publisher=oecd, n=3331)

Variables missing data

  • oecd:OECD.ELS.EMP,DSD_LMS@DF_LMS_INCIDENCE_UNEMP,1.0 (outcome, name=long_term_unemployment_share) — vintage not on disk
  • oecd:OECD.ELS.EMP,DSD_LMS@DF_LMS_DURATION,1.0 (outcome, name=median_unemployment_duration) — vintage not on disk
  • oecd:DSD_EPL@DF_EPL (treatment, name=oecd_epl_strictness) — vintage not on disk
  • oecd:OECD.ELS.SAE,DSD_UBR@DF_UBR,1.0 (controls, name=unemployment_benefit_replacement_rate) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:53:42+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.

Notes

Data-gated on OECD EPL fetcher. Publisher oecd is status: ready but the EPL dataflow (OECD.ELS.EMP,DSD_EPL@DF_EPL) has not been confirmed via the standard fetcher path; v1 pre-registration commits the spec, first-run execution waits on EPL dataflow validation. Alternative specification using Fraser EFW labour-market-flexibility subcomponent (regulation of hiring and firing) as a secondary treatment is a v2 companion.

Authored framework. Read the transparency note.