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Employment protection : its effects on different skill groups and on the incentive to become skilled

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  • Nikolai Stähler

    ()
    (Department of Economics, University of Mainz)

Abstract

Employment protection affects labour market outcomes and hence the incentive to acquire skills. Using a matching model with two education levels in which workers decide ex-ante on their skill formation, it is shown that employment protection can raise the fraction of skilled workers. This will be the case if workers obtain a sufficiently large fraction of the rent created by skill formation. Furthermore, it will be shown that high-skilled workers face shorter unemployment duration and lower dismissal probabilities.

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Bibliographic Info

Paper provided by Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim in its series Working Papers of the Research Group Heterogenous Labor with number 05-07.

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Length: 18 pages
Date of creation: 10 Oct 2005
Date of revision:
Handle: RePEc:knz:hetero:0507

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Keywords: education ; employment protection ; unemployment ; search and matching models;

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References

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  1. Mortensen, Dale T & Pissarides, Christopher, 1999. "New Developments in Models of Search in the Labour Market," CEPR Discussion Papers 2053, C.E.P.R. Discussion Papers.
  2. Dale T. Mortensen & Christopher A. Pissarides, 2002. "Taxes, Subsidies and Equilibrium Labor Market Outcomes," CEP Discussion Papers dp0519, Centre for Economic Performance, LSE.
  3. Wasmer, Etienne, 2002. "Interpreting Europe and US labor markets differences: the specificity of human capital investments," Arbetsrapport 2003:9, Institute for Futures Studies.
  4. Tito Boeri & Ignacio Conde-Ruiz & Vincenzo Galasso, 2004. "Cross-skill Redistribution and the Tradeoff between Unemployment Benefits and Employment Protection," Working Papers 271, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  5. Dale T. Mortensen & Christopher A. Pissarides, 1993. "Job Creation and Job Destruction in the Theory of Unemployment," CEP Discussion Papers dp0110, Centre for Economic Performance, LSE.
  6. Ann-Sofie Kolm & Birthe Larsen, 2002. "Social Norm, the Informal Sector, and Unemployment," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 59(3), pages 407-, August.
  7. Petrongolo, Barbara & Pissarides, Christopher, 2000. "Looking Into The Black Box: A Survey Of The Matching Function," CEPR Discussion Papers 2409, C.E.P.R. Discussion Papers.
  8. Fella, Giulio, 2005. "Termination restrictions and investment in general training," European Economic Review, Elsevier, vol. 49(6), pages 1479-1499, August.
  9. Pissarides, Christopher A., 1998. "The impact of employment tax cuts on unemployment and wages; The role of unemployment benefits and tax structure," European Economic Review, Elsevier, vol. 42(1), pages 155-183, January.
  10. Pissarides, Christopher A., 2001. "Employment protection," Labour Economics, Elsevier, vol. 8(2), pages 131-159, May.
  11. Yasuhiro Sato & Hiroaki Sugiura, 2003. "On Labor Policies Affecting Investment in General Human Capital," LABOUR, CEIS, vol. 17(4), pages 599-622, December.
  12. 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.
  13. Anita Guelfi, 2004. "Employment Protection and the Incidence of Unemployment: A Theoretical Framework," LABOUR, CEIS, vol. 18(1), pages 29-52, 03.
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