Autore
Eguchi, Kyota

Titolo
Employment Protection Legislation and Cooperation
Periodico
Labour
Anno: 2018 - Volume: 32 - Fascicolo: 1 - Pagina iniziale: 45 - Pagina finale: 73

I argue how cooperative behaviors are influenced by employment protection legislation (EPL), which is viewed in terms of two types of firing costs: administrative costs (such as notification procedures) and monetary transfers (such as severance pay). I focus on the minimum discount factor for mutual cooperation under trigger strategies in a relational contract model, where a firm has two payment options: a formal wage and an informal bonus. It will be shown that administrative costs enhance cooperation when they are low, whereas monetary transfers dampen cooperation when they are high. In addition, I show under what wage scheme cooperation is most likely self-enforced.



SICI: 1121-7081(2018)32:1<45:EPLAC>2.0.ZU;2-X

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