Abstract
I argue that the reason why the United States prefers a lower level of employment protection than the European countries lies in the differences in gains and costs from geographical mobility. I present a model in which labour migration and employment protection are both determined endogenously. The labour market is modelled within a matching framework, where the employment protection reduces both the job finding and job firing rates. Countries with low migration costs and high economic heterogeneity may prefer no employment protection so that workers can move quickly to better horizons rather than being maintained in low productive activities.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
