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Uncertainty and the politics of employment protection

Vindigni, Andrea and Scotti, Simone and Tealdi, Cristina Uncertainty and the politics of employment protection. Journal of Labor Economics, 33 (1). pp. 209-267. ISSN 0734-306X (2015)

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This paper investigates social preferences over employment protection regulation in a general equilibrium model of dynamic labor demand and sheds some light on the comparative dynamics of Eurosclerosis. When firing costs are low, a transition to a rigid labor market is favored by all the employed workers with idiosyncratic productivity below some threshold; when their status quo level is high, preserving a rigid labor market is favored only by the employed with intermediate productivity. A more volatile environment and a lower rate of productivity growth increase the political support for labor market rigidity only in high-rents economies.

Item Type: Article
Identification Number: 10.1086/678306
Uncontrolled Keywords: Labor-market flexibility; Equilibrium unemployment; Severance payments; Firing costs; Job security; Turnover; Wage; Economy; Institutions; Persistence
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
Research Area: Economics and Institutional Change
Depositing User: Ms T. Iannizzi
Date Deposited: 09 Feb 2015 09:55
Last Modified: 09 Feb 2015 09:55
URI: http://eprints.imtlucca.it/id/eprint/2577

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