ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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KARNATAKA-Unsure Steps

ensure the most wage flexibility is also not valid. The ILO has found that flexible adjustment of wages can occur under widely differing industrial relations systems. Third, prescription of minimum wages similarly need not have a negative employment effect since minimum wages resulting from collective bargaining are not impervious to market forces. Fourth, the effect of unemployment benefits available over long periods on the duration of unemployment has been found to be small On the other hand, the economic advantages of a well-functioning unemployment benefits system are clear. Finally, studies have also shown that job security is not a major factor in explaining high unemployment. A number of European countries had relaxed job security rules in the 1980s in the expectation that this would increase employment, but instead the main effect was to shift the structure of employment towards temporary or fixed-term jobs. Employment protection, on the other hand, reduces employment fluctuation over the economic cycle, leaving overall employment relatively unchanged.

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