Unions, Firing Costs, and Unemployment
Leonor Modesto ()
LABOUR, 2008, vol. 22, issue 3, 509-546
Abstract. We study the effects of firing costs in unionized economies with heterogeneous workers. We consider an overlapping generations model where workers participate in the labour market both when young and when old. All workers belong to the same union that sets wages unilaterally. We find that at given wages firing costs increase youth unemployment and decrease old‐age unemployment. However, once the wage response is considered, firing costs increase both youth and old‐age unemployment. Indeed, knowing that when firing costs are higher firms refrain from firing, the union increases the wage of old workers, and, therefore, old‐age unemployment increases.
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Working Paper: Unions, Firing Costs and Unemployment (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:labour:v:22:y:2008:i:3:p:509-546
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1121-7081
Access Statistics for this article
LABOUR is currently edited by Franco Peracchi
More articles in LABOUR from CEIS Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().