PlumX Metrics
SSRN
Embed PlumX Metrics

Education and the Welfare Gains from Employment Protection

SSRN Electronic Journal
2010
  • 0
    Citations
  • 684
    Usage
  • 1
    Captures
  • 0
    Mentions
  • 0
    Social Media
Metric Options:   Counts1 Year3 Year

Metrics Details

Article Description

This paper studies the impact of an European-like labor market regulation on the return to schooling, equilibrium unemployment and welfare. We show that firing costs and temporary employment have opposite effects on educational choices. We furthermore demonstrate that a laissez faire economy with no regulation is inefficient as it is characterized by insufficient educational investments leading to excess job destruction and inadequate job creation. By stabilizing employment relationships, firing costs may spur educational investments and therefore lead to welfare and productivity gains, though a first-best policy would be to subsidize education. However, there is little chance for a dual labor market, as is common in many European countries, with heavily regulated long-term contracts and more flexible short-term contracts to raise the incentives to schooling and aggregate welfare.

Bibliographic Details

Olivier Charlot; Franck Malherbet

Elsevier BV

Human capital; job destruction; matching frictions; efficiency

Provide Feedback

Have ideas for a new metric? Would you like to see something else here?Let us know