Job protection, industrial relations and employment
AbstractIn a dynamic stochastic monopoly union model we show that firing costs have a small and ambiguous impact on the level of employment if the union precommits to future wages. Further, in comparison with the commitment equilibrium and for very general union preferences, the no-commitment equilibrium exhibits higher wages and a lower employment level. Since commitment-like equilibria are more likely in cooperative bargain environments, these results suggest that, coeteris paribus, the interaction between employment protection and the quality of industrial relations reduces unemployment. We provide evidence on OECD countries which is consistent with this predictions.
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Bibliographic InfoPaper provided by Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) in its series DISCE - Quaderni dell'Istituto di Economia dell'Impresa e del Lavoro with number ieil0050.
Date of creation: Oct 2007
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Web page: http://www.unicatt.it/Istituti/EconomiaImpresaLavoro
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Firing costs; unemployment; industrial relations.;
Find related papers by JEL classification:
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-15 (All new papers)
- NEP-BEC-2008-04-15 (Business Economics)
- NEP-DGE-2008-04-15 (Dynamic General Equilibrium)
- NEP-LAB-2008-04-15 (Labour Economics)
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