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Labour Turnover Costs and Average Labour Demand

Author

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  • Bertola, Giuseppe

Abstract

The effect of labour turnover costs on average employment in a partial equilibrium model of labour demand, depends on the form of the revenue function, on the rates of discount and labour attrition, and on the relative size of hiring and firing costs. If discount and attrition rates are strictly positive, firing costs may well increase average employment even when hiring costs reduce it.

Suggested Citation

  • Bertola, Giuseppe, 1991. "Labour Turnover Costs and Average Labour Demand," CEPR Discussion Papers 601, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:601
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    Keywords

    Job Security; Labour Contracts; Turnover Costs;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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