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Uncertainty and the Politics of Employment Protection

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  • Andrea Vindigni
  • Simone Scotti
  • Cristina Tealdi

Abstract

This paper investigates social preferences over employment protection regulation in a general equilibrium model of dynamic labor demand and sheds some light on the comparative dynamics of Eurosclerosis. When firing costs are low, a transition to a rigid labor market is favored by all the employed workers with idiosyncratic productivity below some threshold; when their status quo level is high, preserving a rigid labor market is favored only by the employed with intermediate productivity. A more volatile environment and a lower rate of productivity growth increase the political support for labor market rigidity only in high-rents economies.

Suggested Citation

  • Andrea Vindigni & Simone Scotti & Cristina Tealdi, 2015. "Uncertainty and the Politics of Employment Protection," Journal of Labor Economics, University of Chicago Press, vol. 33(1), pages 209-267.
  • Handle: RePEc:ucp:jlabec:doi:10.1086/678306
    DOI: 10.1086/678306
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    2. Tortia, Ermanno C., 2021. "Employment protection regimes and dismissal of members in worker cooperatives," MPRA Paper 109214, University Library of Munich, Germany.
    3. Edoardo Di Porto & Leandro Elia & Cristina Tealdi, 2017. "Informal work in a flexible labour market," Oxford Economic Papers, Oxford University Press, vol. 69(1), pages 143-164.
    4. Tortia, Ermanno Celeste, 2019. "Employment protection regimes in worker co-operatives: dismissal of worker members and distributive fairness," MPRA Paper 94536, University Library of Munich, Germany.
    5. Michał Pilc, 2018. "Should the Government Provide Jobs for Everyone? Societal Expectations and Their Impact on Labour Market Institutions and Outcomes," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 4, pages 179-210.
    6. Vincent Anesi & Philippe De Donder, 2013. "A coalitional theory of unemployment insurance and employment protection," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(3), pages 941-977, April.

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