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During the heyday of neoliberalism, employment protection was widely believed to be one of the main causes of Europe’s poor economic performance and high unemployment. We challenge this view and instead argue that employment protection is crucial to preserving Europe’s export success in higher value-added industries. In particular, we explore the relationship between employment protection and skills development.

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There has been a long debate concerning whether unions are exclusive or inclusive with respect to immigrants and ethnic minorities. In the exclusive view of unions, unionization is expected to increase the likelihood of employers asking questions that discriminate against immigrants and ethnic minorities and decrease the likelihood of employers asking Equal Employment Opportunity (EEO) questions related to immigrant or ethnic minority status. The contrary is expected for the inclusive view. Our analysis, using New Zealand data for job applications, provides some support for the inclusive view of unions, as the higher the unionization rate, the more likely EEO information is sought, but no relationship is found between unionization rate and discriminatory questioning. This suggests that unions are probably helpful in promoting diversity but not yet in combating discrimination against immigrants and ethnic minorities in hiring.

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