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Author/Editor:
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Zhou, Jian-Ping
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Publication Date:
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April 01, 2006
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Electronic Access:
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Free Full text
(PDF file size is 473KB).
Use the free
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.
The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
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Summary:
Over the last 15 years, the reforms of employment protection legislation (EPL) in European countries have mainly eased hiring and firing restrictions for temporary employment while leaving the strict EPL provisions for regular or permanent contracts unchanged. Recent reforms in France follow this pattern. Using a search-matching model, we argue that this type of partial reform is inefficient: easing restrictions on temporary jobs fosters both job creation and job destruction, but strict EPL discourages both. The overall impact on equilibrium unemployment is thus ambiguous, depending on the characteristics of the specific labor market. Simulations of the model, calibrated for the French labor market, suggest that the job destruction effect is stronger, thus raising the unemployment rate.
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Series:
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Working Paper No. 06/108
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Subject(s):
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Unemployment | France | Labor markets | Economic models
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Author's Keyword(s):
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Unemployment | job creation | fixed-dureation contracts | employment protection | search-matching model |
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English
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Publication Date:
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April 01, 2006
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ISBN/ISSN:
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0 / 1934-7073
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Format:
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Paper
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Stock No:
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WPIEA2006108
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Pages:
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29
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Price:
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US$15.00 )
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Please address any questions about this title to
publications@imf.org
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