Unemployment and employment protection in a unionized economy with search frictions

Nikolai Stähler

No 2007,04, Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank

Abstract: In theoretical literature, the effects of employment protection on unemployment are ambiguous. Higher employment protection decreases job creation as well as job destruction. However, in most models, wages are bargained individually between workers and firms. Using a conventional matching model in which a monopoly union sets wages, I show that employment protection can unambiguously increase unemployment. Interestingly, I find that tightening the restrictions on redundancies and dismissals may even increase the probability of dismissal.

Keywords: employment protection; search and matching models; unemployment; unions (search for similar items in EconPapers)
JEL-codes: J41 J64 J65 J68 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-dge and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/19681/1/200704dkp.pdf (application/pdf)

Related works:
Journal Article: Unemployment and Employment Protection in a Unionized Economy with Search Frictions (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubdp1:5558

Access Statistics for this paper

More papers in Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().