Abstract:
The effects on the aggregate unemployment rate of employment-protection provisions has been the subject of considerable debate. This paper shows that if firms pay efficiency wages to encourage effort in the workplace, the effect of increasing employment security is to increase the efficiency wage but not necessarily to increase unemployment.
More papers in Working Papers from Tasmania - Department of Economics Address: UNIVERSITY OF TASMANIA, DEPARTMENT OF ECONOMICS, HOBART TASMANIA 7001 AUSTRALIA. Contact information at EDIRC. Series data maintained by Thomas Krichel ().
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