have tried to explain wage rigidity by arguing that insiders face little layoff risk due to employment fluctuations caused … recent microeconomic evidence which shows that firm-specific uncertainty explains a large part of establishments' employment … is small enough to support an equilibrium with a constant nominal wage. According to the model, nominal wage contracts …

We aim to explain the rising share of short-term employment in Europe using a matching model with growth. We find that … share in total employment. …