TY  - JOUR
AU  - Bertola,Giuseppe
AU  - Rogerson,Richard
TI  - Institutions and Labor Reallocation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5828
PY  - 1996
Y2  - November 1996
UR  - http://www.nber.org/papers/w5828
L1  - http://www.nber.org/papers/w5828.pdf
N1  - Author contact info:
Giuseppe Bertola
Dipartimento di Economia, Università di Torino
Via Po 53
I-10124 Torino
Italy
E-Mail: giuseppe.bertola@unito.it

Richard Rogerson
Woodrow Wilson School of
  Public and International Affairs
323 Bendheim Hall
Princeton University
Princeton, NJ 08544
Tel: 609-258-4839
Fax: 609-258-5349
E-Mail: rdr@princeton.edu
AB  - Despite stringent dismissal restrictions in most European countries, rates of job creation and destruction are remarkably similar across European and North American labor markets.  This paper shows that relative-wage compression is conducive to higher employer-initiated job turnover, and argues that wagesetting institutions and job-security provisions differ across countries in ways that are both consistent with rough uniformity of job turnover statistics and readily explained by intuitive theoretical considerations.  When viewed as a component of the mix of institutional differences in Europe and North America, European dismissal restrictions are essential to a proper interpretation of both similar patterns in job turnover and marked differences in unemployment flows.
ER  -