Unions, firing costs, and unemployment

Leonor Modesto*

*Autor correspondente para este trabalho

Resultado de pesquisarevisão de pares

3 Citações (Scopus)

Resumo

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.
Idioma originalEnglish
Páginas (de-até)509-546
Número de páginas38
RevistaLabour
Volume22
Número de emissão3
DOIs
Estado da publicaçãoPublicado - 2008

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