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How Does Employment Protection Legislation Affect Unemployment in Tunisia? A Search Equilibrium Approach

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  • Mr. Domenico Fanizza
  • Miss Taline Koranchelian

Abstract

This paper applies a search matching model with firing restrictions to examine whether the existence of firing restrictions affects the outcome of the matching process and the natural rate of unemployment in Tunisia. The paper concludes that the removal of firing restrictions is likely to produce a favorable but limited impact on unemployment in Tunisia.

Suggested Citation

  • Mr. Domenico Fanizza & Miss Taline Koranchelian, 2005. "How Does Employment Protection Legislation Affect Unemployment in Tunisia? A Search Equilibrium Approach," IMF Working Papers 2005/092, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2005/092
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    References listed on IDEAS

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    1. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June.
    2. Adriana D. Kugler & Giovanni Pica, 2006. "The Effects of Employment Protection and Product Market Regulations on the Italian Labour Market," Chapters, in: Julián Messina & Claudio Michelacci & Jarkko Turunen & Gylfi Zoega (ed.), Labour Market Adjustments in Europe, chapter 4, Edward Elgar Publishing.
    3. Mortensen, Dale & Pissarides, Christopher, 2011. "Job Creation and Job Destruction in the Theory of Unemployment," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 1-19.
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    5. Fanizza, Domenico, 1996. "Employment cycles in search equilibrium," Journal of Economic Dynamics and Control, Elsevier, vol. 20(5), pages 879-904, May.
    6. Garibaldi, Pietro, 1998. "Job flow dynamics and firing restrictions," European Economic Review, Elsevier, vol. 42(2), pages 245-275, February.
    7. Samuel Bentolila & Giuseppe Bertola, 1990. "Firing Costs and Labour Demand: How Bad is Eurosclerosis?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 57(3), pages 381-402.
    8. Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
    9. Bentolila, Samuel & Saint-Paul, Gilles, 1992. "The macroeconomic impact of flexible labor contracts, with an application to Spain," European Economic Review, Elsevier, vol. 36(5), pages 1013-1047, June.
    10. Christopher A. Pissarides, 1999. "Policy Influences on Unemployment: the European Experience," Scottish Journal of Political Economy, Scottish Economic Society, vol. 46(4), pages 389-418, September.
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    Cited by:

    1. Independent Evaluation Group, 2009. "Earnings Growth and Employment Creation," World Bank Publications - Books, The World Bank Group, number 24116.
    2. Christopher A. Hartwell, 2010. "Employment Protection Legislation and Labor Markets in Transition: Assessing the Effects of the Labor Code in Armenia," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 7(2), pages 413-445, December.
    3. Abid, Anis Bou & Drine, Imed, 2011. "Efficiency frontier and matching process on the labour market: Evidence from Tunisia," Economic Modelling, Elsevier, vol. 28(3), pages 1131-1139, May.
    4. Salah Ahmed & Ali Aljane, 2014. "Labor Regulation and Unemployment: The Case of Tunisia," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 3-13.

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    Keywords

    WP; equilibrium unemployment;

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