Employment Protection in an Institutional Perspective
Using the analytical tools of New Institutional Economics it can be shown that efficient employment protection should be differentiated according to the amount and kind of the worker's investment in human capital. Hence, employment protection serves different purposes in different cases. A worker with firm-specific qualifications has to be protected from opportunistic behaviour by the employer, whereas employment protection for generally qualified workers serves as a means of restraining competition through equally qualified outsiders. Due to informational disadvantages of labor jurisdiction, legal employment protection should be partially substituted by implicit contracts on employment protection.
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Volume (Year): 218 (1999)
Issue (Month): 3+4 (March)
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