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| Chen, Yu-Fu; Snower, Dennis; Zoega, Gylfi. |
| In this paper we analyse the employment implications of firing restrictions. We find that when a recession is expected and the trend rate of productivity growth is small, a rise in firing costs affects mainly the hiring decision. Thus there is a negative effect on average employment. When, on the other hand, a boom is expected and the rate of productivity growth is large, firing costs affect mainly the firing decision. Then, as a result, average employment is increased. Our analysis suggests that while firing restrictions might have stimulated employment and reduced unemployment in Europe in the first two decades following World War II - when large supply shocks were absent and the average rate of growth was high - these same restrictions may have had the... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Labor and Human Capital. |
| Ano: 1999 |
URL: http://purl.umn.edu/26177 |
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