Sand in the wheels of the labor market
Subtitle: the effect of firing costs on employment
By: Andrea De Michelis.
Series: International finance discussion papers ;; no. 796; International finance discussion papers (Online) ;; no. 796.
Publisher: Federal Reserve Board
Published: 2004
Place of publication: Washington, D.C
Language: eng
Format: Electronic resource
Description: "This paper examines the effects of firing costs in a dynamic general equilibrium model where firms face stochastic demand.  It derives analytically two simple closed-form equations, one for the supply of labor, the other for its demand.  These equations determine the comparative static effects of changes in firing costs on the labor market.  When negative shocks are more likely to occur than positive shocks, and when the frequency of these shocks is high, firing costs have a substantial negative impact on aggregate employment.  In addition, product market integration, as it has occurred in the formation of the European Union, induces firms to be more wary of future possible downturns and therefore intensifies the negative consequences of firing costs"--Federal Reserve Board web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 9/2/2004.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.