?url_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Adc&rft.relation=http%3A%2F%2Feprints.imtlucca.it%2F1427%2F&rft.title=Uncertainty+and+the+politics+of+employment+protection&rft.creator=Vindigni%2C+Andrea&rft.creator=Scotti%2C+Simone&rft.creator=Tealdi%2C+Cristina&rft.subject=HB+Economic+Theory&rft.subject=HD+Industries.+Land+use.+Labor&rft.description=This+paper+investigates+the+social+preferences+over+labor+market+exibility%2C+in+a+general+equilibrium+model+of+dynamic+labor+demand.+We+demonstrate+that+how+the+economy+responds%0D%0Ato+productivity+shocks+depends+on+the+power+of+labor+to+extract+rents+and+on+the+status+quo+level+of+the+firing+cost.+In+particular%2C+we+show+that+when+the+firing+cost+is+initially+relatively+low%2C+a+transition+to+a+rigid+labor+market+is+favored+by+all+the+employed+workers+with+idiosyncratic+productivity+below+some+threshold+value.+Conversely%2C+when+the+status+quo+level+of+the+firing+cost+is+relatively+high%2C+the+preservation+of+a+rigid+labor+market+is+favored+by+the+employed+with+intermediate+productivity%2C+whereas+all+other+workers+favor+more+exibility.+A+more+volatile+environment%2C+and+a+lower+rate+of+productivity+growth%2C+i.e.%2C+%22bad+times%2C%22+increase+the+political+support+for+more+labor+market++rigidity+only+where+labor+appropriates+of+relatively+large+rents.+The+coming+of+better+economic+conditions+not+necessarily+favors+the+demise+of+high+firing+costs+in+rigid+high-rents+economies%2C+because+%22good+times%22+cut+down+the+support+for+flexibility+among+the+least+productive+employed+workers.+The+model+described+provides+some+new+insights+on+the+comparative+dynamics+of+labor+market+institutions+in+the+U.S.+and+in+Europe+over+the+last+few+decades%2C+shedding+some+new+light+both+on+the+reasons+for+the+original+build-up+of+%22Eurosclerosis%2C%22+and+for+its+relative+persistence+until+the+present+day.&rft.publisher=IMT+Institute+for+Advanced+Studies+Lucca&rft.date=2012-11&rft.type=Working+Paper&rft.type=NonPeerReviewed&rft.format=application%2Fpdf&rft.language=en&rft.identifier=http%3A%2F%2Feprints.imtlucca.it%2F1427%2F1%2FEIC_WP_6_2012.pdf&rft.identifier=++Vindigni%2C+Andrea+and+Scotti%2C+Simone+and+Tealdi%2C+Cristina++Uncertainty+and+the+politics+of+employment+protection.++EIC+working+paper+series++%236%2F2012++++IMT+Institute+for+Advanced+Studies+Lucca++++ISSN+2279-6894.++++++