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Employment Protection and the Incidence of Unemployment: A Theoretical Framework

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  • Anita Guelfi

Abstract

The present paper aims to analyse the effects of employment protection on a heterogeneous labour force. To this end, a standard matching model with employment protection has been extended to allow for the existence of two types of workers differing from each other only in the probability of becoming less productive while holding a job. In working out the model it turns out that in equilibrium workers with a relatively higher probability of becoming less productive face both a higher turnover and a longer duration of unemployment. Therefore, employment protection here raises the unemployment rate of this worker category, a result which looks consistent with consolidated evidence but contrasts with standard theoretical results. Copyright 2004, CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd.

Suggested Citation

  • Anita Guelfi, 2004. "Employment Protection and the Incidence of Unemployment: A Theoretical Framework," LABOUR, CEIS, vol. 18(1), pages 29-52, March.
  • Handle: RePEc:bla:labour:v:18:y:2004:i:1:p:29-52
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    Cited by:

    1. Maciej Bukowski & Grzegorz Koloch & Piotr Lewandowski & Anna Baranowska & Iga Magda & Arkadiusz Szydlowski & Jacek Bielinski & Magdalena Bober & Malgorzata Sarzalska & Julian Zawistowski, 2008. "Employment in Poland 2007. Security on a Flexible Labour Market," Books and Reports published by IBS, Instytut Badan Strukturalnych, number zwp2007 edited by Maciej Bukowski.
    2. Stähler Nikolai, 2006. "Employment Protection: Its Effects on Different Skill Groups and on the Incentive to become Skilled," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 226(1), pages 41-54, February.
    3. Siebert, W. Stanley, 2006. "Labour Market Regulation in the EU-15: Causes and Consequences – A Survey," IZA Discussion Papers 2430, Institute for the Study of Labor (IZA).

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