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Labour Market Reforms in Portugal 2011-15

A Preliminary Assessment

image of Labour Market Reforms in Portugal 2011-15

This report, commissioned by the XIX Government of Portugal, provides an evaluation of the comprehensive labour market reforms undertaken in Portugal over the period 2011-2015. It describes reforms in the areas of employment protection legislation, unemployment benefits, activation, collective bargaining, minimum wages and working time. The report reviews the reforms in detail and assesses the available evidence on the impact they have had on the labour market. The report concludes that the Portuguese labour market reforms were a move in the right direction. However, despite the progress made, many challenges remain and some of the reforms may not have gone far enough. Unemployment remains high and this situation has fuelled an increase in both poverty and long-term unemployment The labour market remains highly segmented and, in the context of very low inflation, the presence of downward nominal wage rigidity is likely to remain a barrier to the competitiveness of the Portuguese economy – unless productivity growth is strengthened.

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Assessment and recommendations

Over the period 2011-2015, Portugal carried out a comprehensive package of reforms aimed at reducing labour market segmentation and (long-term) unemployment, on the one hand, while increasing flexibility, competitiveness and resilience, on the other. The reforms included changes to employment protection legislation (EPL), unemployment benefits, activation policies, collective bargaining and working time arrangements. This chapter offers a brief summary of these reforms, together with an analysis of their intended and (where possible) actual impact on the labour market.

English

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