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Employment Protection: Its Effects on Different Skill Groups and on the Incentive to become Skilled

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  • Stähler Nikolai

    (Johannes Gutenberg-University, Department of Economics (FB03/LS Goerke), D-55099 Mainz, Germany)

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.

Suggested Citation

  • 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.
    • Handle: RePEc:jns:jbstat:v:226:y:2006:i:1:p:41-54
    DOI: 10.1515/jbnst-2006-0105
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    References listed on IDEAS

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