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Job Protection — It is Good to be an Insider

Markus Gebauer

IZA Journal of Labor Policy, 2023, vol. 13, issue 1, 50

Abstract: This study develops a search and matching model for labour markets with temporary and permanent contracts. It matches empirical patterns of higher matching rates and lower surplus for temporary workers and predicts an increase in separation taxes leads to a fall in the number of new permanent jobs, an increase in their wages, and stable separation rates because temporary workers shield permanent workers from adverse shocks. We find empirical support using a regional French policy experiment, the “Contrat de Transition Professionelle”, which increased separation taxes for recently hired permanent workers in firms with fewer than 1,000 workers.

Keywords: dual labor markets; dismissal taxes; propensity score matching (search for similar items in EconPapers)
JEL-codes: J08 J21 J32 J41 J82 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:izajlp:v:13:y:2023:i:1:p:50:n:2

DOI: 10.2478/izajolp-2023-0003

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