On the one hand, to the extent that EPL raises the costs of workforce adjustments and/or distorts the optimal composition of employment between temporary and regular workers, it is likely to have a negative impact on the efficient allocation of labour and, ultimately, on productivity growth. In this context, in a general equilibrium framework, Hopenhayn and Rogerson (1993) show how the distortion induced by firing restrictions pushes firms to use resources less efficiently. As a result, employment levels adjust at a lower speed and productivity is reduced. Bertola (1994) presents a growth model where job security provisions decrease returns to investment and capital accumulation.