We study the effects of employment protection taking into account that firms can invest in R&D or buy new technologies in order to restore their productivity. To do so we develop an equilibrium matching model with an imperfect labor and innovation market. If employment protection is introduced,...

Formal severance plans became common among office workers in the early years of the Great Depression, but then grew little over the next two decades, despite major changes in labor relations law, the regularity of employment, and the industrial disruptions of a world war. That stability ended...