Employment, Macroeconomic Fluctuations and Job Security
AbstractThe paper explores the influence of job security provisions on employment and unemployment. We show that this influence depends on the persistence of the macroeconomic fluctuations to which the labour market is exposed, and on employees’ bargaining power in wage negotiations. Specifically, costs of firing and hiring reduce employment and stimulate unemployment when the macroeconomic fluctuations are sufficiently prolonged and employees have sufficient bargaining power; but firing and hiring costs can have the opposite effect if the fluctuations are transient and employees are weak. In this way, the paper offers an explanation for Europe’s favourable unemployment performance vis-à-vis the United States in the 1950s and 1960s (when macroeconomic fluctuations were transient and union strength was moderate), and Europe’s relatively unfavourable unemployment performance since the mid-1970s (when fluctuations were prolonged and unions were stronger).
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1430.
Date of creation: Jul 1996
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Find related papers by JEL classification:
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Yu-Fu Chen & Dennis Snower & Gylfi Zoega, 2001.
"Labour Market Institutions and Macroeconomic Shocks,"
Dundee Discussion Papers in Economics
123, Economic Studies, University of Dundee.
- Yu-Fu Chen & Dennis Snower & Gylfi Zoega, 2003. "Labour-market Institutions and Macroeconomic Shocks," LABOUR, CEIS, vol. 17(2), pages 247-270, 06.
- Chen, Yu-Fu & Snower, Dennis J. & Zoega, Gylfi, 2002. "Labour Market Institutions and Macroeconomic Shocks," CEPR Discussion Papers 3480, C.E.P.R. Discussion Papers.
- Chen, Yu-Fu & Snower, Dennis J. & Zoega, Gylfi, 2002. "Labour-Market Institutions and Macroeconomic Shocks," IZA Discussion Papers 539, Institute for the Study of Labor (IZA).
- Chen, Yu-Fu & Snower, Dennis J. & Gylfi, Zoega, 1999.
"Firing Costs: Eurosclerosis or Eurosuccesses?,"
HWWA Discussion Papers
78, Hamburg Institute of International Economics (HWWA).
- Diaz-Vazquez, Pilar & Snower, Dennis J., 2003.
"On-the-Job Training, Firing Costs and Employment,"
IZA Discussion Papers
910, Institute for the Study of Labor (IZA).
- Amable, Bruno & Demmou, Lilas & Gatti, Donatella, 2007. "Employment Performance and Institutions: New Answers to an Old Question," IZA Discussion Papers 2731, Institute for the Study of Labor (IZA).
- repec:dun:dpaper:94 is not listed on IDEAS
- Amable, Bruno & Gatti, Donatella, 2001. "The Impact of Product Market Competition on Employment and Wages," IZA Discussion Papers 276, Institute for the Study of Labor (IZA).
- repec:hal:wpaper:halshs-00590495 is not listed on IDEAS
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.