Labor market reforms, job instability, and the flexibility of the employment relationship

Détails

ID Serval
serval:BIB_C5C4CF2D3576
Type
Article: article d'un périodique ou d'un magazine.
Collection
Publications
Titre
Labor market reforms, job instability, and the flexibility of the employment relationship
Périodique
European Economic Review
Auteur⸱e⸱s
Matouschek N., Ramezzana P., Robert-Nicoud F.
ISSN
0014-2921
Statut éditorial
Publié
Date de publication
01/2009
Peer-reviewed
Oui
Volume
53
Numéro
1
Pages
19-36
Langue
anglais
Résumé
We endogenize separation in a search model of the labor market and allow for bargaining over the continuation of employment relationships following productivity shocks to take place under asymmetric information. In such a setting separation may occur even if continuation of the employment relationship is privately efficient for workers and firms. We show that reductions in the cost of separation, owing for example to a reduction in firing taxes, lead to an increase in job instability and, when separation costs are initially high, may be welfare decreasing for workers and firms. We furthermore show that, in response to an exogenous reduction in firing taxes, workers and firms may switch from rigid to flexible employment contracts, which further amplifies the increase in job instability caused by policy reform.
Mots-clé
Search, Bargaining, Asymmetric information, Labor market reform
Web of science
Création de la notice
27/10/2016 10:12
Dernière modification de la notice
20/08/2019 15:41
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