Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/153036 
Year of Publication: 
2006
Series/Report no.: 
ECB Working Paper No. 602
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We exploit homogeneous firm level data of manufacturing and non-manufacturing sectors to study the impact of firing restrictions on job flow dynamics across 14 European countries. We find that more stringent firing laws dampen the response of job destruction to the cycle, thus making job turnover less counter-cyclical. Moreover, the impact of firing costs on job creation and job destruction varies across sectors, depending on sector-specific trend growth. Our findings clearly suggest that such costs are more important in contracting than in growing sectors.
Subjects: 
business cycle
Europe
Firing Costs
Gross Job Flows
JEL: 
J23
J63
J68
Document Type: 
Working Paper

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