Showing a limited preview of this publication:
This paper explores the influence of on-the-job learning on the employment effect of firing costs. In the absence of on-the-job learning, the theoretical literature shows that firing costs may increase average employment (over the booms and recessions of the business cycle). We show that the existence of on-the-job learning weakens this effect. In fact, when the amount of on-the-job learning is sufficiently large, a rise in firing costs tends to reduce average employment.
Published Online: 2005-4-4
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston