TY  - RPRT
        AU  - Kramarz, Francis
AU  - Michaud, Marie-Laure
        TI  - The Shape of Hiring and Separation Costs
        PY  - 2004/Jun/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 1170
        UR  - https://www.iza.org/index.php/publications/dp1170
        AB  - In this article, we estimate the structure of costs of hiring, terminating, and retiring employees
in France. We use a representative panel data set of French establishments that contains
direct measures of these various costs as well as measures of entries and exits for the years
1992 and 1996. This data set results from the match of two sources: the Wage Structure
Survey and the Workforce Movement Questionnaire. We show that the cost of hiring into
permanent contracts is larger than the cost of hiring into fixed-term contracts. But these costs
are small in comparison to the costs of retiring or terminating workers. Furthermore, collective
terminations (dismissal of at least 10 workers during a 30 days period) are much more
expensive than individual terminations. Hiring and separations are similar in one aspect: they
entail no or little firm-specific fixed cost. Furthermore, termination and hiring costs are
concave and induce firms to group their permanent hirings and separations. Retirement costs
are linear. These estimates show that regulations imposed by French labor laws significantly
affect the structure and the magnitude of these costs.
        KW  - entry
KW  - adjustment costs
KW  - firm behavior
KW  - exit
        ER  -