Lay-off restraints, employment subsidies, and the demand for labour

Horst Siebert and Ngo Long

No 190, Discussion Papers, Series I from University of Konstanz, Department of Economics

Abstract: The paper introduces the concept of a firm's normal employment level as a weighted average of past employment levels and it analyzes the impact of an incentive scheme in which a firm receives a reward (or pays a penalty) when it deviates above (below) its normal employment level. The result is that such an institutional setting may imply a cyclical demand in labour. Thus, institutional arrangements may .be responsible for business cycles.

Date: 1984
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:kondp1:190

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