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La protection de l'emploi : des vertus stabilisatrices ?

Author

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  • Yann Algan

    (EUREQua)

Abstract

OECD countries displaying stringent employment protection legislation turn out to experience much less pronounced aggregate fluctuations. This paper uses this stylized fact to gauge the impact of employment protection on fluctuations costs. This analysis is run under a dynamic general equilibrium matching model with capital accumulation and risk aversion. Under this framework, implementing in the US an employment protection legislation «in the likes» of that of the European countries would decrease aggregate fluctuations by 10% and increase welfare by 2,2%. This result is strongly at odds with the current literature which has ignored the valuable stabilizing effects of employment protection so far

Suggested Citation

  • Yann Algan, 2004. "La protection de l'emploi : des vertus stabilisatrices ?," Cahiers de la Maison des Sciences Economiques v04019, Université Panthéon-Sorbonne (Paris 1).
    • Handle: RePEc:mse:wpsorb:v04019
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    File URL: ftp://mse.univ-paris1.fr/pub/mse/cahiers2004/V04019.pdf
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    Cited by:

    1. Albertini, Julien & Fairise, Xavier, 2013. "Search frictions, real wage rigidities and the optimal design of unemployment insurance," Journal of Economic Dynamics and Control, Elsevier, vol. 37(9), pages 1796-1813.

    More about this item

    Keywords

    Employment protection; unemployment; job turnover; fluctuation costs; welfare;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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