|This centre is a member of The LSE Research Laboratory [RLAB]: CASE | CEE | CEP | FMG | SERC | STICERD||Cookies?|
Paper No' CEPDP0628: | Full paper
Save Reference as: BibTeX File | EndNote Import File
Keywords: Labor market policies; Firing taxes, Probation period, Temporary contracts, Unemployment
JEL Classification: J64;J63;E24
Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: CEP Discussion Papers
Share: Google Bookmarks | Facebook | Twitter
Abstract:This paper studies the effects of firing taxes on the job destruction rate, when probation period - or temporary contract - policies are implemented in an otherwise exogenous job separation search model. It is shown that contrary to conventional wisdom, firing taxes can amplify the job turnover rate by providing incentives to destroy surviving matches at the end of the probation period. Moreover, low skill workers are shown to be more severely affected while wage inequality across different productivity groups may increase.
Copyright © CEP & LSE 2003 - 2013 | LSE, Houghton Street, London WC2A 2AE | Tel: +44(0)20 7955 7673 | Email: email@example.com | Site updated 26 May 2013