We use a matching framework to explore the hypothesis that firing costs are a decreasing function of labor market tightness. Conventional wisdom suggests that differences in employment protection legislation (EPL) cause differences in labor market performance. Our hypothesis suggests a reverse...

We address theoretically and empirically the impact of R&D and innovation activity (IA) on the use of external numerical flexibility (ENF). We build a firm-sided model showing that a first-order stochastic dominance shift in the productivity distribution function decreases the probability of...

<i> Politiche del lavoro ed esternalità di ricerca </i> (di Riccardo Tilli) - ABSTRACT: This paper focuses on both qualitative and quantitative effects of five policy instruments (firing tax, hiring subsidies, taxation, unemployment benefits and tax structure) in a search and matching model with...

Traditional models of the labor market assume fixed firing costs. This paper explores the implications of variable firing costs, building this new assumption into a matching model with endogenous job destruction. The available evidence on the outcomes of cases brought to labor courts suggests...

This paper considers a model with labor market frictions and monopolistic competition in the goods market. It also introduces proportional income taxation and unemployment benefits with a balanced government budget constraint. The paper evaluates the effects of more competition and higher...

We consider a model in which the labor market is characterized by search frictions and there is monopolistic competition in the goods market. We introduce proportional income taxation and unemployment benefits with Government balanced budget constraint. Then, we evaluate the effects of both more...

Empirical evidence suggests the existence of a negative relationship between rigidities on the labor market and the level of economic activity. In this paper, we provide a background of this evidence. We build a model where the employed worker chooses the optimal level of firing costs by...

In this paper we present a theoretical model in which employment protection legislation (EPL) evolves over time and space as labour market conditions change. The basic hypothesis around which the model is built is that when it is easy for workers to find a new job, the strictness of EPL is...