Aging and Job Security
We model a firm’s choice as to the age composition of dismissed workers for different assumptions about the level of firing costs. We find that when the cost of firing is independent of age, a higher level of firing costs will induce firms to fire their younger workers while lower costs induce them to fire the older ones. A corresponding effect is not found in the age dimension of the hiring decision. It follows that job protection favours more senior workers even when the cost of firing is independent of age and seniority.
|Date of creation:||Dec 2007|
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- Robert C. Merton, 1973. "Theory of Rational Option Pricing," Bell Journal of Economics, The RAND Corporation, vol. 4(1), pages 141-183, Spring.
- Edward P. Lazear, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, Oxford University Press, vol. 105(3), pages 699-726.
- Yu-Fu Chen & Gylfi Zoega, . "On The Effectiveness Of Firing Costs," Dundee Discussion Papers in Economics 087, Economic Studies, University of Dundee.
- Samuel Bentolila & Giuseppe Bertola, 1990. "Firing Costs and Labour Demand: How Bad is Eurosclerosis?," Review of Economic Studies, Oxford University Press, vol. 57(3), pages 381-402.
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