search query: @author Sorensen, J. R. / total: 1
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| Author: | Risager, O. Sorensen, J. R. |
| Title: | On the effects of firing costs when investment is endogenous : An extension of a model by Bertola |
| Journal: | European Economic Review
1997 : JUL, VOL. 41:7, p. 1343-1353 |
| Index terms: | JOB SECURITY COSTS EMPLOYMENT CONTRACTS INVESTMENT PROFITABILITY LABOUR |
| Language: | eng |
| Abstract: | The paper analyzes how job security policies, resulting in higher firing costs, affect employment in a model that recognizes that these policies also affect profitability and investment. The results show that the effects crucially depend on the exact assumption on goods demand. In case the goods demand is very elastic, firing costs have large negative effects on trend employment and investment. If the demand is inelastic or not very elastic, the effects are small. The paper also analyzes the relationship btw. trend employment, investment and firing costs under alternative assumptions about the substitution elasticity btw. capital and labour. |
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