On the short-run effects of labor market reforms

• 成果类型: Article
• 署名作者: Veracierto, Marcelo
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Chicago
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2006.02.007
• 发表日期: 2007
• 页码: 1213-1229
• 关键词: fixed term contracts; temporary contracts; firing costs; severance payments

摘要

While several countries have recognized the need of introducing flexibility to their labor markets, there are different ways of doing so. Using a small open economy with tenure-dependent separation taxes, this paper compares introducing a full reform with two partial alternatives: (1) the introduction of temporary contracts, and (2) the elimination of separation costs from all new hires while freezing them on the workers that were hired prior to the reform. The first alternative can achieve a first-best long run outcome but leads to a sharp initial recession. The second alternative generates a similar long run outcome but avoids the recessionary adjustment. (C) 2006 Elsevier B.V. All rights reserved.