Institutions and Labor Reallocation

Bertola, Giuseppe; Rogerson, Richard

doi:10.3386/w5828

Cited by 151 publications

(236 citation statements)

References 18 publications

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“…In his search and matching model the term of notice is endogenous and generates lower wages because risk averse workers accept a lower income during the productive period of a job, in order to receive a higher income during unproductive times. Bertola and Rogerson (1997) adapt a similar reasoning. If workers are risk-averse and value job security, they will accept lower wages in exchange for more employment protection.…”

Section: Theoretical Literaturementioning

confidence: 99%

Better protected, better paid: Evidence on how employment protection affects wages

Wiel¹

2010

Labour Economics

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Better Protected, Better Paid: Evidence on How Employment Protection Affects Wages * This paper empirically establishes the effect of the employer's term of notice on the wage level of employees. The term of notice is defined as the period an employer has to notify workers in advance of their up-coming dismissal. The wages paid during this period are an important element of firing costs and hence employment protection. To find a causal effect, I exploit the exogenous change in the term of notice that resulted from the introduction of a new Dutch law in 1999. Strong evidence is found that a longer 'dormant' term of notice leads to higher wages. In my sample, an additional month of notice increases wages by three percent, ceteris paribus.

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Section: Theoretical Literaturementioning

confidence: 99%

Better protected, better paid: Evidence on how employment protection affects wages

Wiel¹

2010

Labour Economics

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“…Strong employment protection increases incentives to invest in local skills as job duration is anticipated to be much higher, thus reducing mobility; it increases the incentives to invest in job-specific skills and thus reduces job-to-job mobility; a decent amount of market imperfections and particularly obstacles to job creations in booming regions/sectors reduce the return from mobility in depressed regions; and wage compression reduces the returns from moving to booming regions. See Hassler et al (2000Hassler et al ( , 2005, Sargent (1998, 2002), Ichino (1995), Wasmer (2006) and Bertola and Rogerson (1997) …”

Section: Decision Treementioning

confidence: 99%

Local social capital and geographical mobility

David

Janiak

Wasmer

2010

Journal of Urban Economics

126

111

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a b s t r a c tIn the North of Europe, club membership is higher than in the South, but the frequency of contacts with friends, relatives and neighbors is lower. We link this fact to another one: the low geographical mobility rates in the South of Europe relative to the North.To interpret these facts, we build a model of local social capital and mobility. Investing in local ties is rational when workers do not expect to move to another region. We find that observationally close individuals may take different paths characterized by high local social capital, low mobility and high unemployment, vs. low social capital, high propensity to move and higher employment probability. Employment protection reinforces the accumulation of local social capital and thus reduces mobility.European data supports the theory: within a country and at the individual level, more social capital is associated with lower mobility.

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“…On the theoretical side, Bertola and Rogerson (1997), Alvarez and Veracierto (1999), Mortensen and Pissarides (2003), Pries and Rogerson (2005) have all analyzed the impact of policy reforms on labor market flows in a search and matching context. These modeling efforts offer well-defined predictions of gross labor flows and hence a disaggregated view of the processes underlying observed trends in unemployment stocks.…”

Section: Introductionmentioning

confidence: 99%

Trade liberalization, labor reforms and formal–informal employment dynamics

2012

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This paper studies gross worker flows to explain the rising informality in Brazilian metropolitan labor markets from 1983-2002. In particular, we examine the impact of trade and constitutional reforms, (that include increased firing costs, tighter restrictions on overtime work, and fewer restrictions on union activity) occurring during the period. We find aggregate sectoral movements to be driven largely by changes in the hiring rates which, in turn are driven largely by the constitutional reforms. Trade liberalization accounts for roughly 1% of the increase in informality, while the constitutional reforms account for 40-50%. JEL Classification: J23, J38, J63, J65, O17, F16

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Institutions and Labor Reallocation

Cited by 151 publications

References 18 publications

Better protected, better paid: Evidence on how employment protection affects wages

Better protected, better paid: Evidence on how employment protection affects wages

Local social capital and geographical mobility

Trade liberalization, labor reforms and formal–informal employment dynamics

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