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...

This paper studies the impact of an unemployment protection legislation reform - a substitution between an experience rated tax and firing costs - on the level and structure of unemployment by skills. In this purpose, we consider a matching model which incorporates endogenous reservation...