Arbeitspapier

Dual Employment Protection Legislation : A Framework for Analysis

In many countries, Employment Protection Legislation (EPL) establishes different regulations for certain groups of workers who face more disadvantages in the labor market (young workers, women, unskilled workers, etc.) with the aim of improving their employability. Wellknown examples are the introduction of atypical employment contracts (e.g. temporary and determined-duration contracts) which ease firing restrictions for some, but not all, workers. This paper discusses the effects of EPL varying among workers of different skills on the level and composition of unemployment, job flows, productivity and welfare. By using an extension of Mortensen-Pissarides? (1994) search model where heterogeneous workers compete for the same jobs, we are able to identify several key channels through which changing firing costs for some groups of workers affects hiring and firing of all workers and, hence, may have a different impact on aggregate labor market variables than reducing firing costs across the board. Some analytical and simulation results also show that these effects of differentiated firing costs by workers? skills may be different depending upon the initial state of the labor market.

Language
Englisch

Bibliographic citation
Series: IZA Discussion Papers ; No. 1564

Classification
Wirtschaft
Labor Turnover; Vacancies; Layoffs
Unemployment: Models, Duration, Incidence, and Job Search
Subject
firing costs
unemployment
matching
Arbeitslosigkeit
Arbeitsplatzsuchmodell
Kündigungsschutz
Kündigung
Kosten
Theorie

Event
Geistige Schöpfung
(who)
Dolado, Juan José
Jansen, Marcel
Jimeno, Juan F.
Event
Veröffentlichung
(who)
Institute for the Study of Labor (IZA)
(where)
Bonn
(when)
2005

Handle
Last update
10.03.2025, 11:41 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Dolado, Juan José
  • Jansen, Marcel
  • Jimeno, Juan F.
  • Institute for the Study of Labor (IZA)

Time of origin

  • 2005

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