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Auriol, Emmanuelle

The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Schirle, Tammy / de Vries, Frans / Zulehner, Christine

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Volume 4, Issue 1


Volume 6 (2006)

Volume 4 (2004)

Volume 2 (2002)

Volume 1 (2001)

On-the-Job Learning, Firing Costs and Employment

Pilar Díaz-Vázquez / Dennis J Snower / Luis E Arjona-Béjar
Published Online: 2005-04-04 | DOI: https://doi.org/10.2202/1538-0645.1237


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.

Keywords: Average employment; Firing costs; Severance Payments; On-the-job learning; Insider wage

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Published Online: 2005-04-04

Citation Information: Contributions in Economic Analysis & Policy, Volume 4, Issue 1, ISSN (Online) 1538-0645, DOI: https://doi.org/10.2202/1538-0645.1237.

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