Title: Enforcement of employment security regulations, on-the-job search and unemployment duration
Abstract: Contrary to the popular wisdom, `sclerotic' European labour markets are characterised by relatively large job turnover rates. A model is developed which – unlike standard theories of job matching with on-the-job search – can account for the coexistence of strict employment security regulations, significant job-to-job shifts and high long-term unemployment rates in these countries. This is because: (i) employment security regulations can only be enforced by increasing the number of workers on `short-term jobs', and (ii) the latter compete for jobs with unemployed jobseekers. Evidence is presented showing that job-finding probabilities of the unemployed are decreasing in the incidence of temporary employment, in line with the predictions of the model.
Publication Year: 1999
Publication Date: 1999-01-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 171
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