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| Author: | Messina, J. Vallanti, G. |
| Title: | Job flow dynamics and firing restrictions: Evidence from Europe |
| Journal: | Economic Journal
2007 : JUN, VOL. 117:521, p. 279-301 |
| Index terms: | industries job creation job turnover labour costs |
| Language: | eng |
| Abstract: | This paper examines the effect of firing restrictions on job flow dynamics in Europe. Based on homogenous data on manufacturing and non-manufacturing industries from 14 countries, the study suggest that the response of job destruction to the cycle is weakened by stricter firing laws. Therefore job turnover becomes less counter-cyclical. In addition, the creation and destruction of jobs is weaker in declining sectors than in expanding sectors due to the stricter EPL. This finding implicates that faster growth diminishes the significance of firing costs in company's employment decisions. |
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