In the United States, many laid-off workers are recalled to their former employer. I develop an asymmetric information model of layoffs in which high productivity workers are more likely to be recalled and may choose to remain unemployed rather than accept a low-wage job. In this case,...

West Germany's Employment Promotion Act of 1985 facilitated the use of fixed-term contracts and increased the number of dismissals above which the employer is required to establish a "social plan" (involving severance payments). I assess the effect of this reduction in "firing costs" on...

When information about workers? abilities is imperfect, past employment histories are important determinants of unemployment duration. This paper studies the effects of employment protection laws on unemployment spells in two countries: Italy and Spain

This paper uses a Shapiro-Stiglitz efficiency wage model to analyse the effects of firing costs on wages, employment, expected utility and profits. It considers that the probability of a non-shirker being fired depends on an exogenous shock which follows a two-state Markov process. It finds that...

In response to high and enduring youth unemployment, large payroll tax cuts for young workers were implemented in two Swedish reforms in 2007 and 2009. This paper analyses the effects of the reforms on worker outcomes and firm performance in the retail industry, an important employer of young...

In 2007 and 2008 Polish governments introduced a series of reforms which led to a substantial reduction in the tax "wedge" (in Polish: "klin") on labour. We show that when considered together the package of introduced reforms brought much greater reductions in the tax burden compared to a widely...