Sunk firing costs shelter employment and this effect is typically amplified by uncertainty due to an option value of … waiting. Thus, if sunk firing costs are high, e.g. due to a employment protection legislation, and if recession related losses … be sufficient to avoid layoffs by firms operating with current losses. Depending on the size of sunk hiring costs …

We study short- and long-term wage effects of two important elements of non-wage labour costs: firing costs and payroll …, which predicts an ambiguous effect on wages: firing costs are expected to increase wages, because they increase the … for the endogeneity of the treatment status, suggest that decreased firing costs and payroll taxes have a positive overall …