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Welfare Improving Employment Protection

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Author Info

  • Michele Belot
  • Jan Boone
  • Jan van Ours

Abstract

This paper presents a theoretical model to show that in sectors where workers invest in firm specific knowledge employment protection legislation can raise employment, productivity and welfare. The model also predicts a U-shaped relation between firing costs and unemployment. Finally, it gives a rationale for the observation that more educated workers tend to have better protected jobs.

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File URL: http://www.degit.ifw-kiel.de/papers/degit_09/C009_004.pdf
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Bibliographic Info

Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c009_004.

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Length: 23 pages
Date of creation: Jun 2004
Date of revision:
Handle: RePEc:deg:conpap:c009_004

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Related research

Keywords: employment protection; human capital; hold-up; reforms; welfare;

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References

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  1. Bertola, Giuseppe & Rogerson, Richard, 1996. "Institutions and Labour Reallocation," CEPR Discussion Papers 1519, C.E.P.R. Discussion Papers.
  2. Belot, M.V.K. & Ours, J.C. van, 2001. "Unemployment and Labor Market Institutions: An Empirical Analysis," Discussion Paper 2001-50, Tilburg University, Center for Economic Research.
  3. Jens Suedekum & Peter Ruehmann, 2003. "Severance Payments and Firm-specific Human Capital," LABOUR, CEIS, vol. 17(1), pages 47-62, 03.
  4. Mortensen, Dale T & Pissarides, Christopher A, 1994. "Job Creation and Job Destruction in the Theory of Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 397-415, July.
  5. Nickell, S. & Layard, R., 1997. "Labour Market Institutions and Economic Performance," Papers 23, Centre for Economic Performance & Institute of Economics.
  6. Kuhn, Peter, 1992. "Mandatory Notice," Journal of Labor Economics, University of Chicago Press, vol. 10(2), pages 117-37, April.
  7. Etienne Wasmer, 2006. "Interpreting Europe and US labor markets differences : the specificity of human capital investments," Sciences Po publications info:hdl:2441/8904, Sciences Po.
  8. Hopenhayn, Hugo & Rogerson, Richard, 1993. "Job Turnover and Policy Evaluation: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 101(5), pages 915-38, October.
  9. Hosios, Arthur J, 1990. "On the Efficiency of Matching and Related Models of Search and Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 57(2), pages 279-98, April.
  10. Ricardo J. Caballero & Mohamad L. Hammour, 1996. "The Macroeconomics of Specificity," NBER Working Papers 5757, National Bureau of Economic Research, Inc.
  11. Teulings,Coen & Hartog,Joop, 1998. "Corporatism or Competition?," Cambridge Books, Cambridge University Press, number 9780521590730, October.
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