We build a model where firing transfers and firing taxes interact with the degree of centralisation in wage bargaining. The comparative statics of the model imply that firing taxes are less harmful for aggregate employment in economies with centralised bargaining as opposed to economies with...

In a setting that focuses on efficient dynamic hours-workers substitution we show that contingent worksharing contributes to worker retention during bad business spells and to sustained hiring during good spells. As a consequence, average employment increases on both accounts. We also show that...