The Impact of Firing Costs on Turnover and Unemployment: Evidence from Colombia

Adriana D. Kugler

Chapter 12 in Latin American Economic Crises, 2004, pp 201-221 from Palgrave Macmillan

Abstract: Abstract Job-security regulations may impose substantial rigidities on the ability of firms to adjust employment levels over the business cycle. The effects of dismissal costs on employment and unemployment are difficult to estimate, and empirical evidence on their net effects is ambiguous. Using cross-sections, Grubb and Wells (1993) argued that stricter provisions are negatively correlated with employment, while Bertola (1990) found no relation between job-security provisions and medium- and long-run employment. These mixed results are not surprising, given that cross-section studies are subject to omitted variable bias, simultaneity problems and possible endogeneity of the regulations.

Keywords: Hazard Rate; Informal Sector; Formal Sector; Exit Rate; Formal Worker (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-4039-4385-9_12

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DOI: 10.1057/9781403943859_12

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