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Do firing costs change wages of low- and high-educated workers differently?

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  • Jhon Jair Gonzalez Pulgarin

    (Université du Maine)

Abstract

Wages of highly educated workers are affected differently by firing taxes compared with wages of less educated workers. Using a variety of data sources, I evaluate the effects of increasing firing taxes across the United States on wages of high- and low-educated workers. In particular, I analyze how changes in the regulation of the employment-at-will across states affected the wages between 1970–1995. Application of quasiexperimental methods yields results suggesting a negative effect for low-educated workers and no significant effects for the highly educated. The standard search and matching model with endogenous search extended to account for two types of agents points as well to a negative effect of the firing costs on wages, with a more pronounced effect for low-educated workers.

Suggested Citation

  • Jhon Jair Gonzalez Pulgarin, 2023. "Do firing costs change wages of low- and high-educated workers differently?," French Stata Users' Group Meetings 2023 28, Stata Users Group.
    • Handle: RePEc:boc:fsug23:28
    as

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