Firing Costs and Average Employment with Efficient Labor Contracts.

We study a two-period model of efficient labor contracts between a firm and its workers, where firings and voluntary quits but no new hirings occur in period 2. We demonstrate that an increase in the firm's firing cost always raises average employment over the two periods when this cost is initially "high", and may or may not raise average employment when it is initially "low".

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Year of publication:	1996
Authors:	Strand, J.
Institutions:	Økonomisk institutt, Universitetet i Oslo
Subject:	CONTRACTS \| ENTREPRISES \| WORKERS \| PRICING

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Series:	Memorandum.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Memorandum Number 15/1996 12 pages
Classification:	J40 - Particular Labor Markets. General ; J41 - Contracts: Specific Human Capital, Matching Models, Efficiency Wage Models, and Internal Labor Markets ; J21 - Labor Force and Employment, Size, and Structure
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005652140