Firing versus Continuing Employment if an Economic Setback is Expected

A simple model evaluating a firm’s optimal employment reaction to an imminent recession is presented. Firing costs shelter employment – and this effect is typically amplified by uncertainty due to an option value of waiting. However, this job protection effect is reduced if the expected probability...

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Bibliographic Details

Published in:	MAGKS - Joint Discussion Paper Series in Economics (Band 18-2009)
Main Author:	Göcke, Matthias
Format:	Work
Language:	English
Published:	2009
Subjects:	Firing costs and uncertainty Wirtschaft probability, duration and size of recession Economics
Online Access:	PDF Full Text
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