Why is the Employment Protection Stricter in Europe than in the US?
AbstractIn this paper, we argue that the reason why the United States prefer a lower level of employment protection than the European countries lies in the differences in gains and costs from geographical mobility.We present a model where labor migration and employment protection are both determined endogenously.The labor market is modeled within a matching framework, where the employment protection reduces both the job finding and firing rates.Countries with low migration costs and high economic heterogeneity may prefer no employment protection so that workers can move quickly to better horizons rather than being maintained in low productive activities.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2001-79.
Date of creation: 2001
Date of revision:
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employment policy; labour mobility; voting; job search;
Find related papers by JEL classification:
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-11-21 (All new papers)
- NEP-EEC-2001-11-21 (European Economics)
- NEP-LAB-2001-11-21 (Labour Economics)
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