Sunk firing and hiring costs shelter existent employment. This effect is typically amplified by uncertainty due to an option value of waiting. Thus, if (i) sunk firing costs are high, for example due to an employment protection legislation or due to the loss of firm-specific human capital, or if...

Abstract Sunk firing and hiring costs shelter existent employment. This effect is typically amplified by uncertainty due to an option value of waiting. Thus, if (i) sunk firing costs are high, for example due to an employment protection legislation or due to the loss of firm-specific human...