Fixed-term employment contracts in an equilibrium search model

• 成果类型: Article
• 署名作者: Alvarez, Fernando; Veracierto, Marcelo
• 署名单位: University of Chicago; National Bureau of Economic Research; Federal Reserve System - USA; Federal Reserve Bank - Chicago
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2012.05.015
• 发表日期: 2012
• 页码: 1725-1753
• 关键词: Temporary contracts; Fixed-term contracts; firing costs; search; unemployment

摘要

We develop a theoretical model of firm dynamics and unemployment and characterize equilibria with tenure dependent separation taxes. The model is a version of the Lucas and Prescott island model with undirected search. Two equivalent decentralizations are considered: one with spot labor markets and one with long-term employment relations. We model temporary contracts as the special case of a separation tax that only applies to workers with tenure higher than J. While in principle these contracts require a J-dimensional state space, equilibrium allocations solve a simple dynamic programming problem characterized by two-dimensional inaction set(s). (C) 2012 Published by Elsevier Inc.