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- Title
Unemployment and Employment Protection in a Unionized Economy with Search Frictions.
- Authors
Stähler, Nikolai
- Abstract
In the theoretical literature, the effects of employment protection on unemployment are ambiguous. Higher employment protection reduces job creation as well as job destruction. However, in most models, wages are bargained individually between workers and firms. Using a conventional matching model in which a monopoly union sets wages, I show that employment protection can unambiguously increase unemployment. Interestingly, I find that tightening the restrictions on redundancies and dismissals may even increase the probability of dismissal.
- Subjects
UNEMPLOYMENT; LABOR laws; DISMISSAL of employee laws; WAGE bargaining; INDUSTRIAL relations; LABOR economics
- Publication
LABOUR: Review of Labour Economics & Industrial Relations, 2008, Vol 22, Issue 2, p271
- ISSN
1121-7081
- Publication type
Article
- DOI
10.1111/j.1467-9914.2008.00410.x