Firing the old or the young: a non-perpetual real options analysis

Yu-Fu Chen, Gylfi Zoega

    Research output: Working paperDiscussion paper

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    Abstract

    We model a firm’s choice as to the age composition of dismissed workers for different assumptions about the level of firing costs. We find that with high firing costs (not to mention rising ones), firms will be inclined to fire younger workers while with low costs of firing, the older workers are at risk. Since with high firing costs old workers are better protected against layoffs, an ageing population has the effect of making employment-protection legislation more stringent.
    Original languageEnglish
    PublisherUniversity of Dundee
    Publication statusPublished - 1999

    Publication series

    NameDundee Discussion Papers in Economics
    PublisherUniversity of Dundee
    No.96
    ISSN (Print)1473-236X

    Keywords

    • Age-structure
    • Tenure
    • Firing decisions

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  • Cite this

    Chen, Y-F., & Zoega, G. (1999). Firing the old or the young: a non-perpetual real options analysis. (Dundee Discussion Papers in Economics; No. 96). University of Dundee.