Resource title

Firing costs : eurosclerosis or eurosuccesses?

Resource image

image for OpenScout resource :: Firing costs : eurosclerosis or eurosuccesses?

Resource description

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 opposite effects in the 1970s and 1980s, when significant negative supply shocks occurred.

Resource author

Yu-Fu Chen, Dennis J. Snower, Zoega Gylfi

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/2227

Resource license

Adapt according to the presented license agreement and reference the original author.