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Abstract

Despite stringent dismissal restrictions in most European countries, rates of job creation and destruction are remarkably similar across European and North American labour markets. This paper shows that relative-wage compression is conducive to higher employer-initiated job turnover, and argues that wage-setting institutions and job security provisions differ across countries in ways that are both consistent with rough uniformity of job turnover statistics and readily explained by intuitive theoretical considerations. When viewed as a component of the mix of institutional differences in Europe and North America, European dismissal restrictions are essential to a proper interpretation of both similar patterns in job turnover, and marked differences in unemployment flows.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1519.

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Date of creation: Nov 1996
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Handle: RePEc:cpr:ceprdp:1519

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Related research

Keywords: Firing Costs; Gross Job Turnover; Wage Compression;

Other versions of this item:

Find related papers by JEL classification:

• J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
• J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs

References

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As found by EconAcademics.org, the blog aggregator for Economics research:

1. La rentrée laboral
   by Samuel Bentolila in Nada Es Gratis on 2011-09-09 05:00:02
2. Employment protection effects
   by chris dillow in Stumbling and Mumbling on 2011-01-11 13:43:39

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