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A Model of Labour Demand with Linear Adjustment Costs

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Author Info
Bentolila, Samuel
Saint-Paul, Gilles

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Abstract

This paper formulates a discrete-time model to study the effects of firing costs on labour demand by a firm facing linear adjustment costs under serially independent productivity shocks. We show that a rise in firing costs reduces the firm's marginal propensities to hire and fire, and may increase or decrease its average steady-state labour demand.

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Publisher Info
Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 690.

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Date of creation: Aug 1992
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Handle: RePEc:cpr:ceprdp:690

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Related research
Keywords: Firing Costs; Labour Demand; Unemployment;

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Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.
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This page was last updated on 2009-10-29.

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