Firing costs in a business cycle model with endogenous separations

Dennis Wesselbaum

No 1550 [rev.], Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: This paper introduces productivity-dependent firing costs into an otherwise standard endogenous separations matching model. We suggest an alternative to the standard fix cost approach and account for empirical evidence emphasizing that firing costs vary across workers. We show that the model with firing costs outperformes the model without firing costs and replicates the empirical facts fairly well. Furthermore, we present cross-country evidence that countries with stricter employment protection have a weaker Beveridge curve relation and surprisingly more volatile job flow rates.

Keywords: Beveridge Curve; Endogenous Separations; Firing Costs; Second Moments of Job Flows (search for similar items in EconPapers)
JEL-codes: E24 E32 J64 (search for similar items in EconPapers)
Date: 2010
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https://www.econstor.eu/bitstream/10419/130550/1/857066625.pdf (application/pdf)

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Journal Article: Firing costs in a business cycle model with endogenous separations (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1550r

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