This paper analyzes the effect of firing costs on aggregate productivity growth. For this purpose, a model of … firms, and is sustained as entrants imitate the best incumbents. In this framework, firing costs not only induce … misallocation of labor, but also affect growth by affecting firms' exit decisions. Importantly, charging firing costs only to …

The data indicate that non-wage labour costs in Germany have reached a record high in recent years. From 1972 to 2001 …, the ratio of non-wage labour costs to direct compensation in West German manufacturing industry rose from 55.6 per cent to … 81.2 per cent. The topic of non-wage labour costs is increasingly being discussed among and between the political parties …