Skip navigation
Skip navigation

On the Welfare Implications of Firing Costs

Booth, Alison; Zoega, Gylfi


This is a paper on the theory of institutions. It provides a rationale for the presence of firing costs in OECD countries based on a market failure that takes the form of an externality. Workers have firm-specific and industry-specific skills, and in each period there is a nonzero probability that a worker quits. The quitting probability makes the private discount rate (used by firms in making decisions about firing workers) higher than the social discount rate. This generates a "quitting...[Show more]

CollectionsANU Research Publications
Date published: 2003
Type: Journal article
Source: European Journal of Political Economy
DOI: 10.1016/S0176-2680(03)00034-X


File Description SizeFormat Image
01_Booth_On_the_Welfare_Implications_of_2003.pdf208.27 kBAdobe PDF    Request a copy

Items in Open Research are protected by copyright, with all rights reserved, unless otherwise indicated.

Updated:  19 May 2020/ Responsible Officer:  University Librarian/ Page Contact:  Library Systems & Web Coordinator