Dismissal protection has experienced many statutory changes in Germany in the past decades. This paper estimates the effects of dismissal protection on the hazard of leaving the establishment using as identification that workers employed before the legal amendment maintained their previous...

This paper uses the job creation and destruction model of the search and matching type proposed by García-Pérez and Osuna (2014) to study the effectiveness of subsidizing permanent job creation as a strategy to reduce labour market segmentation between permanent and temporary contracts. The...

This article is an idiosyncratic survey of the insider-outsider theory, describing the vision underlying the theory, and evaluating salient contributions to the literature in the light of this vision. We also indicate what appear to have been dead-ends and red herrings in past research. The...

This paper introduces endogenous on-the-job training in the job creation and destruction model of the search and matching type by García-Pérez and Osuna (Dual labour markets and the tenure distribution: Reducing severance pay or introducing a single contract, 2014). The objective is to compare...

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 are with a high probability expected to be only...

This paper provides a simple model which explains the choice between permanent and temporary jobs. This model, which incorporates important features of actual employment protection legislations neglected by the economic literature so far, reproduces the main stylized facts about entries into...

Our search model combines two search methods, the public employment service (PES) and random search. The separation rate is endogenous, the job matching process consists of three rounds. In the first and the second respectively the short-term (STU) and the long-term unemployed (LTU) randomly...

The search model contains two matching technologies, the public employment service (PES) with its type-specific registers for workers and vacancies, and the search market where firms advertise vacancies and unemployed who have not been placed by the PES search for jobs. The placement activity of...

General equilibrium analyses of layoff costs have had mixed messages on the implications for employment. This paper brings out the economic forces at work and explains the disparate results. Specifically, we show that positive employment effects of layoff costs come through reducing labor...

This paper analyzes the effects of firing costs in a broader setup than what is usually done, allowing for on-the-job training. By doing so the traditional analysis is extended with respect to two points: On the one hand firing costs clearly increase firm training because worker and firm are...