Format:
37, XXXIV S.
,
graph. Darst.
,
22 cm
Series Statement:
Working paper series / National Bureau of Economic Research 12791
Content:
Fixed-term employment contracts have been introduced in number of European countries as a way to provide flexibility to economies with high employment protection levels. We introduce these contracts into the equilibrium search model in Alvarez and Veracierto (1999), a version of the Lucas and Prescott island model, adapted to have undirected search and variable labor force participation. We model a contract of length J as a tax on separations of workers with tenure higher than J. We show a version of the welfare theorems, and characterize the efficient allocations. This requires solving a control problem, whose solution is characterized by two dimensional inaction sets. For J=1 these contracts are equivalent to the case of firing taxes, and for large J they are equivalent to the laissez-faire case. In a calibrated verion of the model, we find that temporary contracts with J equivalent to three years length close about half of the gap between those two extremes.
Note:
Literaturverz. S. 36 - 37
Additional Edition:
Erscheint auch als Online-Ausgabe
Language:
English
URL:
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