The Effects of Employment Protection on the Choice of Risky Projects

Amihai Glazer and Vesa Kanniainen

No CESifo Working Paper No. 689, CESifo Working Paper Series from CESifo Group Munich

Abstract: We consider a firm that is subject to employment protection laws that limit the firm's ability to fire labor. In particular, we suppose that though a firm which shuts down can fire all its workers, it may fire no fewer. Compared to a firm that is subject to no employment protection, a firm constrained in firing will prefer a risk-free project over a risky one, but may prefer the riskier of two risky projects.

Keywords: project choice; labor protection (search for similar items in EconPapers)
JEL-codes: J23 M13 (search for similar items in EconPapers)
Date: 2002
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Related works:
Working Paper: The Effects of Employment Protection on the Choice of Risky Projects (2000)
Working Paper: The Effects of Employment Protection on the Choice of Risky Projects (2000)
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