This paper provides an explanation for the observed positive relationship between youth unemployment and the cost of … firing workers. When the cost of firing workers is high, firms only fire when the present discounted value of future losses … young workers are then the first to go due to their longer remaining tenure. In contrast, when the cost of firing workers is …

Strong hysteresis in the labour market (see Cross, 1995) requires workers to be heterogeneous in terms of the cost of … does not for this reason depend on ad-hoc differences in the cost of hiring and firing workers. -- Hysteresis ; hiring and …