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The Political Economy of Labour Market Institutions$
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Gilles Saint-Paul

Print publication date: 2000

Print ISBN-13: 9780198293323

Published to Oxford Scholarship Online: November 2003

DOI: 10.1093/0198293321.001.0001

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Employment Protection

Employment Protection

Chapter:
(p.101) 4 Employment Protection
Source:
The Political Economy of Labour Market Institutions
Author(s):

Gilles Saint‐Paul

Publisher:
Oxford University Press
DOI:10.1093/0198293321.003.0005

This chapter studies the political support for employment protection. It is shown to be stronger, the larger the employed's rents. Another result is that if employment protection is the sole instrument, and is a continuous variable, its welfare‐maximizing level is strictly positive. However, that level is lower than the one that the employed want to choose. Also, a more intense process of obsolescence reduces the support for employment protection.

Keywords:   discretionary employment protection, employment protection, productivity shocks, self‐sustaining social optima, tenure, wage‐exposure trade‐off

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