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

  • Stähler Nikolai

    ()

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

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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Article provided by De Gruyter in its journal Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik).

Volume (Year): 226 (2006)
Issue (Month): 1 (February)
Pages: 41-54

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Handle: RePEc:jns:jbstat:v:226:y:2006:i:1:p:41-54
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