Job Protection — It is Good to be an Insider

This study develops a search and matching model for labour markets with temporary and permanent contracts. It matches empirical patterns of higher matching rates and lower surplus for temporary workers and predicts an increase in separation taxes leads to a fall in the number of new permanent jobs,...

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Veröffentlicht in:	IZA journal of labor policy 2023-01, Vol.13 (1)
1. Verfasser:	Gebauer, Markus
Format:	Artikel
Sprache:	eng
Schlagworte:	dismissal taxes dual labor markets J03 J08 J21 J32 J41 J82 propensity score matching
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description	This study develops a search and matching model for labour markets with temporary and permanent contracts. It matches empirical patterns of higher matching rates and lower surplus for temporary workers and predicts an increase in separation taxes leads to a fall in the number of new permanent jobs, an increase in their wages, and stable separation rates because temporary workers shield permanent workers from adverse shocks. We find empirical support using a regional French policy experiment, the “Contrat de Transition Professionelle”, which increased separation taxes for recently hired permanent workers in firms with fewer than 1,000 workers.
doi_str_mv	10.2478/izajolp-2023-0003
format	Article
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source	Walter De Gruyter: Open Access Journals; EZB Electronic Journals Library
subjects	dismissal taxes dual labor markets J03 J08 J21 J32 J41 J82 propensity score matching
title	Job Protection — It is Good to be an Insider
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