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Reorganization of Firms and Job Stability: A Theoretical Approach


  • Eva Moreno-Galbis


This paper seeks to provide a theoretical explanation to the contradictory results found by the empirical literature concerning the effects of recent workplace organizational changes on job stability. We develop an endogenous job destruction model à la Mortensen-Pissarides (1994) where a modernizing firm may offer to the worker a tayloristic job (traditional organization) or a holistic job (modern organization). We then study the evolution of job stability during the transition from a tayloristic to a holistic organization. Our results point towards the importance of the restructuring costs supported by firms during the modernizing trajectory as the main factor responsible for the variations in job stability. Copyright 2007 The Author; Journal compilation 2007 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd..

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  • Eva Moreno-Galbis, 2007. "Reorganization of Firms and Job Stability: A Theoretical Approach," LABOUR, CEIS, vol. 21(3), pages 389-418, September.
  • Handle: RePEc:bla:labour:v:21:y:2007:i:3:p:389-418

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    References listed on IDEAS

    1. Burda, Michael & Wyplosz, Charles, 1994. "Gross worker and job flows in Europe," European Economic Review, Elsevier, vol. 38(6), pages 1287-1315, June.
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    3. Coles, Melvyn G & Petrongolo, Barbara, 2002. "A Test Between Unemployment Theories Using Matching Data," CEPR Discussion Papers 3241, C.E.P.R. Discussion Papers.
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    5. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
    6. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
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    9. Kamil Galuscak & Daniel Munich, 2005. "Structural and Cyclical Unemployment: What Can We Derive from the Matching Function?," Working Papers 2005/02, Czech National Bank, Research Department.
    10. Hall, Robert E., 1979. "A theory of the natural unemployment rate and the duration of employment," Journal of Monetary Economics, Elsevier, vol. 5(2), pages 153-169, April.
    11. Kluve, Jochen & Lehmann, Hartmut & Schmidt, Christoph M., 1999. "Active Labor Market Policies in Poland: Human Capital Enhancement, Stigmatization, or Benefit Churning?," Journal of Comparative Economics, Elsevier, vol. 27(1), pages 61-89, March.
    12. Tito Boeri & Katherine Terrell, 2002. "Institutional Determinants of Labor Reallocation in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 51-76, Winter.
    13. Daniel Munich & Jan Svejnar & Katherine Terrell, 2001. "Worker-firm Matching and Unemployment in Transition to a Market," Development and Comp Systems 0012011, EconWPA.
    14. Gerard R. Butters, 1977. "Equilibrium Distributions of Sales and Advertising Prices," Review of Economic Studies, Oxford University Press, vol. 44(3), pages 465-491.
    15. Gregg, Paul & Petrongolo, Barbara, 2005. "Stock-flow matching and the performance of the labor market," European Economic Review, Elsevier, vol. 49(8), pages 1987-2011, November.
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