Using a country-industry panel dataset (EUKLEMS) we uncover a robust empirical regularity,namely that high-risk innovative sectors are relatively smaller in countries with strictemployment protection legislation (EPL). To understand the mechanism, we develop a twosectormatching model where firms...

There is increasing evidence that the interaction between shocks and labour marketinstitutions is crucial to understanding the dynamics of employment. In this paper, we showthat the inclusion of labour adjustment costs in a trade model affects the impact of exchangerate movements on employment....

Perhaps it does. We propose a model in which workers with little education or in the tails of the age distribution the inexperienced and the old have more chance of job failure (mismatch). Recruits' average education should then increase and the standard deviation of starting age decrease when...