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Welfare Improving Employment Protection

  • Michele Belot
  • Jan Boone
  • Jan van Ours

This paper presents a theoretical model to show that in sectors where workers invest in firm specific knowledge employment protection legislation can raise employment, productivity and welfare. The model also predicts a U-shaped relation between firing costs and unemployment. Finally, it gives a rationale for the observation that more educated workers tend to have better protected jobs.

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File URL: http://degit.sam.sdu.dk/papers/degit_09/C009_004.pdf
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Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c009_004.

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Length: 23 pages
Date of creation: Jun 2004
Date of revision:
Handle: RePEc:deg:conpap:c009_004
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References listed on IDEAS
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  1. Wasmer, Etienne, 2002. "Interpreting Europe and US labor markets differences: the specificity of human capital investments," Arbetsrapport 2003:9, Institute for Futures Studies.
  2. Richard Layard & Stephen Nickell, 1998. "Labour Market Institutions and Economic Performance," CEP Discussion Papers dp0407, Centre for Economic Performance, LSE.
  3. Ricardo J. Caballero & Mohamad L. Hammour, 1996. "The Macroeconomics of Specificity," NBER Working Papers 5757, National Bureau of Economic Research, Inc.
  4. Belot, Michele & van Ours, Jan C., 2001. "Unemployment and Labor Market Institutions: An Empirical Analysis," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 403-418, December.
  5. Belot, M.V.K. & van Ours, J.C., 2001. "Unemployment and labor market institutions : An empirical analysis," Other publications TiSEM 29a3de46-e7bc-4b3d-abe5-b, Tilburg University, School of Economics and Management.
  6. Pissarides, Christopher A., 2001. "Employment protection," Labour Economics, Elsevier, vol. 8(2), pages 131-159, May.
  7. Bertola, Giuseppe & Rogerson, Richard, 1996. "Institutions and Labour Reallocation," CEPR Discussion Papers 1519, C.E.P.R. Discussion Papers.
  8. repec:cup:cbooks:9780521590730 is not listed on IDEAS
  9. Mortensen, Dale T & Pissarides, Christopher A, 1994. "Job Creation and Job Destruction in the Theory of Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 61(3), pages 397-415, July.
  10. Hopenhayn, Hugo & Rogerson, Richard, 1993. "Job Turnover and Policy Evaluation: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 101(5), pages 915-38, October.
  11. Hosios, Arthur J, 1990. "On the Efficiency of Matching and Related Models of Search and Unemployment," Review of Economic Studies, Wiley Blackwell, vol. 57(2), pages 279-98, April.
  12. Booth, Alison L. & Zoega, Gylfi, 2003. "On the welfare implications of firing costs," European Journal of Political Economy, Elsevier, vol. 19(4), pages 759-775, November.
  13. Kuhn, Peter, 1992. "Mandatory Notice," Journal of Labor Economics, University of Chicago Press, vol. 10(2), pages 117-37, April.
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