Working paper/research report

Authors list: Göcke, M

Publication year: 2010

URL: https://hdl.handle.net/10419/56535

Title of series: MAGKS Joint discussion paper series in economics

Number in series: 2010, 29

Abstract: 

Sunk firing costs shelter employment and this effect is typically amplified by uncertainty due to an option value of waiting. Thus, if sunk firing costs are high, e.g. due to a employment protection legislation, and if recession related losses are with a high probability expected to be only transitory and not permanent, a relatively small employment subsidy will be sufficient to avoid layoffs by firms operating with current losses. Depending on the size of sunk hiring costs cyclical layoffs or even permanent job destruction can be avoided by short run subsidies during the beginning of a recession.

Harvard Citation style: Göcke, M. (2010) Layoffs in a Recession and Temporary Employment Subsidies when a Recovery is Expected. (MAGKS Joint discussion paper series in economics, 2010, 29). Marburg: Philipps-University Marburg, School of Business and Economics. https://hdl.handle.net/10419/56535

APA Citation style: Göcke, M. (2010). Layoffs in a Recession and Temporary Employment Subsidies when a Recovery is Expected. (MAGKS Joint discussion paper series in economics, 2010, 29). Philipps-University Marburg, School of Business and Economics. https://hdl.handle.net/10419/56535