Workers as Insurance: Anticipated Government Assistance and Factor Demand
This paper investigates the effect of anticipation of government assistance on factor demand when the likeliho od of intervention is perceived to increase with the numbers of worke rs laid off in the event of an adverse realization of product price. Workers thus serve, imperfectly, an insurance function for the firm. Internalization by firms of the political sensitivity of governments of unemployment results in more labor being employed and more output produced, although not necessarily by more labor-intensive methods. T he effect can be an implicit subsidy to capital. An adverse-selection effect on firms' locational choice is also identified. Copyright 1987 by Royal Economic Society.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 39 (1987)
Issue (Month): 4 (December)
|Contact details of provider:|| Postal: |
Fax: 01865 267 985
Web page: http://oep.oupjournals.org/
|Order Information:||Web: http://www.oup.co.uk/journals|
When requesting a correction, please mention this item's handle: RePEc:oup:oxecpp:v:39:y:1987:i:4:p:813-20. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.