Uncertainty and the Politics of Employment Protection

Andrea Vindigni, Simone Scotti, Cristina Tealdi

    Research output: Contribution to journalArticle

    5 Citations (Scopus)

    Abstract

    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.
    Original languageEnglish
    Pages (from-to)209-267
    Number of pages59
    JournalJournal of Labor Economics
    Volume33
    Issue number1
    DOIs
    Publication statusPublished - Jan 2015

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