This paper studies the impact of an European-like labor market regulation on the return to schooling, equilibrium unemployment and welfare. We show that firing costs and temporary employment have opposite effects on educational choices. We furthermore demonstrate that a laissez faire economy...

Consider a labour market with heterogeneous workers. Firms recruit workers by fixing a hiring standard and a wage offer simultaneously. A more demanding hiring standard necessitates a better wage offer in order to attract enough qualified applicants. As a result, an efficiency wage effect is...

Die anhaltende und weiter ansteigende Arbeitslosigkeit stellt ein zentrales wirtschaftspolitisches Problem dar. Dieses Buch beschäftigt sich mit einem besonders heftig umstrittenen Therapiekonzept: dem zweiten Arbeitsmarkt. Im Lichte der modernen Arbeitsmarkttheorien werden die Gründe für die...

We examine wage-bargaining in a two-sector economy when employers and labor unions in each sector are not always aware of all general equilibrium feedback effects. We show analytically that if agents only consider labor demand effects, low real wages and low unemployment result. With an...