The Effects of Employment Protection on the Choice of Risky Projects

Amihai Glazer and Vesa Kanniainen

University of Helsinki, Department of Economics from Department of Economics

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: LABOUR; PROTECTIONISM; RISK (search for similar items in EconPapers)
JEL-codes: M13 J23 (search for similar items in EconPapers)
Date: 2000

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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 (2002)
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Persistent link: http://EconPapers.repec.org/RePEc:fth:helsec:487

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