. To fill this gap, we build a general equilibrium model with heterogeneous agents and firing costs in the tradition of …-level longitudinal data. Spain is particularly interesting, since its labor regulations are among the most protective in the OECD, and …

. To fill this gap, we build a general equilibrium model with heterogeneous agents and firing costs in the tradition of …-level longitudinal data. Spain is particularly interesting, since its labor regulations are among the most protective in the OECD, and …

Empirical evidence indicates that lay-off costs consist of two elements, namely firing costs and severance payments …. This paper investigates business cycle and steady state effects of firing costs and severance payments and discusses the … differences. We find that severance payments imply a lower volatility of key labor market variables compared with firing costs …