Going on the Long Race? – Employment Duration and(De)Regulation of Experimental Stochastic Labor Markets

If the future market wage is uncertain, engaging in long{term employment is risky, withthe risk depending on how regulated the labor market is. In our experiment long{term employment can result either from oering long{term contracts or from repeatedlyand mutually opting for rematching. Treatments dier in how regulations restrict theemployer's exibility in adapting the employment contract to changes of the market(wage). All treatments allow for longer contract duration as well as for mutually optingto be rematched. Eort is chosen by employees after a contract is concluded. Treatmentsvary from no exibility to no restriction at all.[...]