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The reallocation of labour: an international comparison using job tenure

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  • Simon Burgess
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    Abstract

    This paper sets out the issues surrounding the optimal amount of job reallocation. The key factors are the trainability of the workforce, the volatility of demand and the cost of contract termination. The paper uses an international dataset to characterise the nature of labour reallocation and to isolate the effect of country-specific factors. We investigate the extent to which these country differences can be explained by the trainability of the workforce and employment protection legislation. We find that both of these have a significant role to play in affecting the reallocation of labour. In addition, we show that the impact of the country-specific factors varies dramatically by age and industry: much larger differences are found among older workers than younger ones, and in retail trade than in manufacturing.

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    File URL: http://eprints.lse.ac.uk/20232/
    File Function: Open access version.
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    Bibliographic Info

    Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 20232.

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    Length: 32 pages
    Date of creation: Mar 1999
    Date of revision:
    Handle: RePEc:ehl:lserod:20232

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    References

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    1. Diebold, Francis X & Neumark, David & Polsky, Daniel, 1997. "Job Stability in the United States," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 15(2), pages 206-33, April.
    2. repec:fth:prinin:341 is not listed on IDEAS
    3. Hall, Robert E., 1979. "A theory of the natural unemployment rate and the duration of employment," Journal of Monetary Economics, Elsevier, Elsevier, vol. 5(2), pages 153-169, April.
    4. Emerson, Michael, 1988. "Regulation or deregulation of the labour market : Policy regimes for the recruitment and dismissal of employees in the industrialised countries," European Economic Review, Elsevier, vol. 32(4), pages 775-817, April.
    5. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June.
    6. Lazear, Edward P, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 105(3), pages 699-726, August.
    7. Henry S. Farber, 1995. "Are Lifetime Jobs Disappearing? Job Duration in the United States: 1973-1993," NBER Working Papers 5014, National Bureau of Economic Research, Inc.
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    Cited by:
    1. World Bank, 2003. "The Russian Labor Market : Moving from Crisis to Recovery," World Bank Publications, The World Bank, number 15007, October.

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