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On-the-Job Learning, Firing Costs and Employment

Author

Listed:
  • Díaz-Vázquez Pilar

    (Universidad de Santiago de Compostela, Spain)

  • Snower Dennis J

    (Kiel Institute for World Economics, Kiel (Germany), IZA and CEPR)

  • Arjona-Béjar Luis E

    (Universidad de Santiago de Compostela)

Abstract

This paper explores the influence of on-the-job learning on the employment effect of firing costs. In the absence of on-the-job learning, the theoretical literature shows that firing costs may increase average employment (over the booms and recessions of the business cycle). We show that the existence of on-the-job learning weakens this effect. In fact, when the amount of on-the-job learning is sufficiently large, a rise in firing costs tends to reduce average employment.

Suggested Citation

  • Díaz-Vázquez Pilar & Snower Dennis J & Arjona-Béjar Luis E, 2005. "On-the-Job Learning, Firing Costs and Employment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-29, April.
    • Handle: RePEc:bpj:bejeap:v:contributions.4:y:2005:i:1:n:2
    DOI: 10.2202/1538-0645.1237
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    Cited by:

    1. Wolfgang Lechthaler, 2009. "The interaction of firing costs and firm training," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 36(3), pages 331-350, August.

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