Short Job Tenures and Firing Taxes in the Search Theory of Unemployment

Vasileios Gkionakis

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: This paper studies the effects of firing taxes on the job destruction rate, when probationperiod - or temporary contract - policies are implemented in an otherwise exogenous jobseparation search model. It is shown that contrary to conventional wisdom, firing taxescan amplify the job turnover rate by providing incentives to destroy surviving matches atthe end of the probation period. Moreover, low skill workers are shown to be moreseverely affected while wage inequality across different productivity groups mayincrease.

Keywords: Labor market policies; Firing taxes; Probation period; Temporary contracts; Unemployment (search for similar items in EconPapers)
JEL-codes: E24 J63 J64 (search for similar items in EconPapers)
Date: 2004-04
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cep.lse.ac.uk/pubs/download/dp0628.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0628

Access Statistics for this paper

More papers in CEP Discussion Papers from Centre for Economic Performance, LSE
Bibliographic data for series maintained by ().