Restrictions on the ability of employers to fire employees are generally blamed for increasing labour costs. This effect on costs is not generally true if firms pay an efficiency wage. Under a rule that protects workers from wronful dismissala, firms pay a lower wage provided that wages are flexible in the local labour markets. The oppositions of employers to just-cause dismissals is a conseguence of the legal costs generated by the dismissal rules and wage rigidity that preventa attainment of the optimal wage.

Just-Cause dismissal in an efficiency wage model

CUSIN, Giuseppe
2004-01-01

Abstract

Restrictions on the ability of employers to fire employees are generally blamed for increasing labour costs. This effect on costs is not generally true if firms pay an efficiency wage. Under a rule that protects workers from wronful dismissala, firms pay a lower wage provided that wages are flexible in the local labour markets. The oppositions of employers to just-cause dismissals is a conseguence of the legal costs generated by the dismissal rules and wage rigidity that preventa attainment of the optimal wage.
2004
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10278/4531
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