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The Impact of Firing Costs on Turnover and Unemployment: Evidence from Colombia

In: Latin American Economic Crises

Author

Listed:
  • Adriana D. Kugler

Abstract

Job-security regulations may impose substantial rigidities on the ability of firms to adjust employment levels over the business cycle. The effects of dismissal costs on employment and unemployment are difficult to estimate, and empirical evidence on their net effects is ambiguous. Using cross-sections, Grubb and Wells (1993) argued that stricter provisions are negatively correlated with employment, while Bertola (1990) found no relation between job-security provisions and medium- and long-run employment. These mixed results are not surprising, given that cross-section studies are subject to omitted variable bias, simultaneity problems and possible endogeneity of the regulations.

Suggested Citation

  • Adriana D. Kugler, 2004. "The Impact of Firing Costs on Turnover and Unemployment: Evidence from Colombia," International Economic Association Series, in: Enrique Bour & Daniel Heymann & Fernando Navajas (ed.), Latin American Economic Crises, chapter 12, pages 201-221, Palgrave Macmillan.
    • Handle: RePEc:pal:intecp:978-1-4039-4385-9_12
    DOI: 10.1057/9781403943859_12
    as

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