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.
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- 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.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005.
"Unemployment: Macroeconomic Performance and the Labour Market,"
Oxford University Press, number 9780199279173, July.
- Layard, Richard & Nickell, Stephen & Jackman, Richard, 1991. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780198284345, July.
- Chen, Yu-Fu & Snower, Dennis J. & Gylfi, Zoega, 1999.
"Firing Costs: Eurosclerosis or Eurosuccesses?,"
HWWA Discussion Papers
78, Hamburg Institute of International Economics (HWWA).
- Robert C. Merton, 1973. "Theory of Rational Option Pricing," Bell Journal of Economics, The RAND Corporation, vol. 4(1), pages 141-183, Spring.
- Yu-Fu Chen & Gylfi Zoega, . "On The Effectiveness Of Firing Costs," Dundee Discussion Papers in Economics 087, Economic Studies, University of Dundee.
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