Estimates for the U.S. suggest that at least in some sectors productivity enhancing reallocation is the dominant factor in accounting for producitivity growth. An open question, particularly relevant for developing countries, is whether reallocation is always productivity enhancing. It may be...

We use a panel of manufacturing plants from Colombia to analyze how the rise in payroll tax rates over the 1980’s and 1990’s affected the labor market. Our estimates indicate that formal wages fall by between 1.4% and 2.3% as a result of a 10% rise in payroll taxes. This...

Temporary employment contracts allowing unrestricted dismissals were introduced in Spain in 1984 and quickly came to account for most new jobs. As a result, temporary employment increased from around 10% in the mid-eighties to more than 30% in the early nineties. In 1997, however, the Spanish...

Re-licensing requirements for professionals that move across borders are widespread. In this paper, we measure the returns to an occupational license using novel data on Soviet trained physicians that immigrated to Israel. An immigrant re-training assignment rule used by the Israel Ministry of...

Labor market regulations have often being blamed for high and persistent unemployment in Europe, but evidence on their impact remains mixed. More recently, attention has turned to the impact of product market regulations on employment growth. This paper analyzes how labor and product market...

Many workers believe that personal contacts are crucial for obtaining jobs in high-wage sectors. On the other hand, firms in high-wage sectors report using employee referrals because they help provide screening and monitoring of new employees. This paper develops a matching model that can...

Reductions in firing costs are often advocated as a way of increasing the dynamism of labour markets in both developed and less developed countries. Evidence from Europe and the U.S. on the impact of firing costs has, however, been mixed. Moreover, legislative changes both in Europe and the U.S....

This paper investigates the role of employee referrals in the labor market. Using an original data set, I find that industries that pay wage premia and have characteristics associated with high-wage sectors rely mainly on employee referrals to fill jobs. Moreover, unemployment rates are higher...

In this paper, we present a matching model with adverse selection that explains why flows into and out of unemployment are much lower in Europe compared to North America, while employment-to-employment flows are similar in the two continents. In the model,firms use discretion in terms of whom to...

We estimate the effect of immigrant flows on native employment in Western Europe, and then ask whether the employment consequences of immigration vary with institutions that affect labor market flexibility. Reduced flexibility may protect natives from immigrant competition in the near term, but...