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Short job tenures and firing taxes in the search theory of unemployment

Gkionakis, Vasileios (2004) Short job tenures and firing taxes in the search theory of unemployment. CEPDP, 628. Centre for Economic Performance, London School of Economics and Political Science, London, UK. ISBN 0753017539

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Abstract

This paper studies the effects of firing taxes on the job destruction rate, when probation period - or temporary contract - policies are implemented in an otherwise exogenous job separation search model. It is shown that contrary to conventional wisdom, firing taxes can amplify the job turnover rate by providing incentives to destroy surviving matches at the end of the probation period. Moreover, low skill workers are shown to be more severely affected while wage inequality across different productivity groups may increase.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk
Additional Information: © 2004 Vasileios Gkionakis
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System: J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J64 - Unemployment: Models, Duration, Incidence, and Job Search
E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E24 - Macroeconomics: Employment; Unemployment; Wages; Intergenerational Income Distribution (includes wage indexation)
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J63 - Turnover; Vacancies; Layoffs
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 628
Date Deposited: 25 Jul 2008 11:55
URL: http://eprints.lse.ac.uk/19964/

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