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Analysis of employment protection legislation: a model with endogenous labour productivity

  • Lisi, Domenico

This paper analyzes the effects of the different Employment Protection Legislation on the workers choices on effort. The different EPL are modelled through an easy theoretical pattern, characterized by endogenous labour productivity. In particular, it is analyzed how the labour productivity is influenced by the incentives that the different EPL give workers. The model outcomes highlight that the recent reforms produce only a positive temporary effect on the unemployment level, as emphasized by the empirical evidence. Finally, this paper analyzes a new contractual regime in order to see if it could offer in theory a better solution in term of structural employment respect to known standard regimes.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 27191.

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Date of creation: Apr 2008
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Handle: RePEc:pra:mprapa:27191
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  1. Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
  2. Garibaldi, Pietro, 2006. "Personnel Economics in Imperfect Labour Markets," OUP Catalogue, Oxford University Press, number 9780199280674.
  3. Tito Boeri & Pietro Garibaldi, 2007. "Two Tier Reforms of Employment Protection: A Honeymoon Effect?," Carlo Alberto Notebooks 37, Collegio Carlo Alberto.
  4. O Blanchard & A Landier, 2002. "The Perverse Effects of Partial Labour Market Reform: fixed--Term Contracts in France," Economic Journal, Royal Economic Society, vol. 112(480), pages F214-F244, June.
  5. Bentolila, Samuel & Bertola, Giuseppe, 1990. "Firing Costs and Labour Demand: How Bad Is Eurosclerosis?," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 381-402, July.
  6. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June.
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