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 Presco...

Ausführliche Beschreibung

Bibliographische Detailangaben

Hauptverfasser:	Alvarez, Fernando 1964- (VerfasserIn), Veracierto, Marcelo (VerfasserIn)
Format:	Buch
Sprache:	English
Veröffentlicht:	Cambridge, Mass. National Bureau of Economic Research 2006
Schriftenreihe:	Working paper series / National Bureau of Economic Research 12791
Online-Zugang:	Volltext
Zusammenfassung:	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.
Beschreibung:	Literaturverz. S. 36 - 37
Beschreibung:	37, XXXIV S. graph. Darst. 22 cm