Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/322715 
Year of Publication: 
2007
Series/Report no.: 
Discussion Papers Series No. 07-03
Publisher: 
Utrecht University, Utrecht School of Economics, Tjalling C. Koopmans Research Institute, Utrecht
Abstract: 
Why are firm and job turnover rates so similar across OECD countries? We argue that this may be due to the joint regulation of product and labor markets. For our analysis, we build a stochastic equilibrium model with search frictions and heterogeneous multiple-worker firms. This allows us to distinguish firm entry and exit from hiring and firing in a model with equilibrium unemployment. We show that firing costs, sunk entry costs and bureaucratic flow costs have countervailing effects on firm and job turnover as different types of firms select to operate in the market.
Subjects: 
Firing Cost
Product Market Regulation
Firm Selection
Firm Turnover
Job Turnover
Unemployment
JEL: 
E24
J63
J64
J65
Document Type: 
Working Paper

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