Deposit-Refundon Labor A Solution to Equilibrium Unemployment?

The paper studies the employment effects of a deposit-refund scheme on labor in a simple search-theoretic model of the labor market. It is shown that if a firm pays a deposit to the government when it fires a worker, to be refunded when it employs the same or another worker, the vacancy rate increas...

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Bibliographic Details
Main Author: Heijdra, Ben
Other Authors: Ligthart, Jenny
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2000
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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245 0 0 |a Deposit-Refundon Labor  |b A Solution to Equilibrium Unemployment?  |c Ben Heijdra, Jenny Ligthart 
260 |a Washington, D.C.  |b International Monetary Fund  |c 2000 
300 |a 19 pages 
651 4 |a United States 
653 |a Labour; income economics 
653 |a Employment; Economic theory 
653 |a Wages, Compensation, and Labor Costs: General 
653 |a Unemployment: Models, Duration, Incidence, and Job Search 
653 |a Labor markets 
653 |a Aggregate Labor Productivity 
653 |a Unemployment 
653 |a Demand and Supply of Labor: General 
653 |a Aggregate Human Capital 
653 |a Labor 
653 |a Labor Economics: General 
653 |a Labor market 
653 |a Macroeconomics 
653 |a Wages 
653 |a Intergenerational Income Distribution 
653 |a Employment 
653 |a Labor economics 
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520 |a The paper studies the employment effects of a deposit-refund scheme on labor in a simple search-theoretic model of the labor market. It is shown that if a firm pays a deposit to the government when it fires a worker, to be refunded when it employs the same or another worker, the vacancy rate increases and the unemployment rate declines. However, the scheme introduces rigidities in the labor market that may be undesirable in countries wanting to liberalize their labor markets