BIS central bankers’ speeches  5  an adjustment variable, we need the flexible movement of labour to absorb economic shocks. How can we improve the situation? Simply slashing worker protection cannot be the answer.
But when exploring avenues to make labour markets more flexible and efficient, we might heed the advice of the Nobel-winning labour economist Chris Pissarides: “Protect workers, not jobs.” In other words, less stringent employment protection coupled with adequate financial support in the event of a job loss is likely to reduce overall unemployment, while still insuring workers against the vagaries of the market.