Is a stable workforce good for productivity?

Employment stability or employment flexibility? Which is best for the economy? The authors seek to further the debate by analysing the relationship between employment tenure and productivity in six major sectors in 13 European countries. The relationship proves to be a positive one, except in the case of long employment tenure far exceeding the average. By contrast, there was an inverse relationship between tenure and employment levels. To overcome this problem, the authors propose a policy of "protected mobility" on the labour market, together with active labour market policies seeking to combine both flexibility and security.