IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/2000-009.html
   My bibliography  Save this paper

Deposit-Refundon Labor: A Solution to Equilibrium Unemployment?

Author

Listed:
  • Mr. Ben J. Heijdra
  • Ms. Jenny E Ligthart

Abstract

The paper studies the employment effects of a deposit-refund scheme on labor in a simple search-theoretic model of the labor market. It is shown that if a firm pays a deposit to the government when it fires a worker, to be refunded when it employs the same or another worker, the vacancy rate increases and the unemployment rate declines. However, the scheme introduces rigidities in the labor market that may be undesirable in countries wanting to liberalize their labor markets.

Suggested Citation

  • Mr. Ben J. Heijdra & Ms. Jenny E Ligthart, 2000. "Deposit-Refundon Labor: A Solution to Equilibrium Unemployment?," IMF Working Papers 2000/009, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2000/009
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=3402
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    Keywords

    WP; labor market; deposit-refund schemes; firing costs; hiring subsidies; job search; unemployment; A. firm behavior; firm-worker pairing; co-state variable; restructuring firm; rents physical capital; Labor markets; Employment; Wages;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:2000/009. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Akshay Modi (email available below). General contact details of provider: https://edirc.repec.org/data/imfffus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.