Publication
May 2011
This paper documents a puzzling fact, namely that there is a significant negative relation between employment protection legislation and the usage of the intensive margin of labor market adjustments.The author then makes use of a Real Business Cycle model and introduces search and matching frictions as well as adjustment costs along the extensive and the intensive labor market margins. He shows that the model is able to replicate the observed pattern, if we assume low ring costs and relatively large hours adjustment costs.
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English (PDF, 19 pages, 267 KB) |
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Author | Dennis Wesselbaum |
Series | Kiel Institute Working Papers |
Issue | 1701 |
Publisher | Kiel Institute for the World Economy |
Copyright | © 2011 Kiel Institute for the World Economy |