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Labour Turnover Costs and Average Labour Demand

  • Bertola, Giuseppe

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.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 601.

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Date of creation: Dec 1991
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Handle: RePEc:cpr:ceprdp:601
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