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The Effects of Employment Protection on the Choice of Risky Projects

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Author Info
Glazer, A.
Kanniainen, V.

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Abstract

We consider a firm that is subject to employment protection laws that limit the firm's ability to fire labor. In particular, we suppose that though a firm which shuts down can fire all its workers, it may fire no fewer. Compared to a firm that is subject to no employment protection, a firm constrained in firing will prefer a risk-free project over a risky one, but may prefer the riskier of two risky projects.

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Publisher Info
Paper provided by California Irvine - School of Social Sciences in its series Papers with number 00-05.

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Length: 15 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:fth:calirv:00-05

Contact details of provider:
Postal: UNIVERSITY OF CALIFORNIA IRVINE, SCHOOL OF SOCIAL SCIENCES, IRVINECALIFORNIA 91717 U.S.A.

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Related research
Keywords: EMPLOYMENT ; LABOUR ; RISK;

Other versions of this item:

Find related papers by JEL classification:
J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings
K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June. [Downloadable!] (restricted)
  2. Bentolila, Samuel & Saint-Paul, Gilles, 1994. "A model of labor demand with linear adjustment costs," Labour Economics, Elsevier, vol. 1(3-4), pages 303-326, September. [Downloadable!] (restricted)
    Other versions:
  3. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September. [Downloadable!] (restricted)
  4. Glazer, A. & Kanniainen, V., 2000. "Term Length and the Quality of Appointments," University of Helsinki, Department of Economics 485, Department of Economics.
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Raquel Fonseca & Natalia Utrero, 2006. "Employment Protection Laws, Barriers to Entrepreneurship, Financial Markets and Firm Size," Working Papers 454, RAND Corporation Publications Department. [Downloadable!]
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This page was last updated on 2009-11-20.

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