# Flexibility at the Margin and Labor Market Volatility in OECD Countries

Sala, Hector, Silva Becerra, Jose I., Toledo, Manuel (2012) Flexibility at the Margin and Labor Market Volatility in OECD Countries. Scandinavian Journal of Economics, 114 (3). pp. 991-1017. ISSN 1467-9442. (doi:10.1111/j.1467-9442.2012.01715.x) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided) (KAR id:40242)

 The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided. (Contact us about this Publication) Official URLhttp://dx.doi.org/10.1111/j.1467-9442.2012.01715.x

## Abstract

We study the business-cycle behavior of segmented labor markets with flexibility at the margin (e.g., just affecting fixed-term contracts). We present a matching model with temporary and permanent jobs (i) where there is a gap in the firing costs associated with these types of jobs and (ii) where there are restrictions in the creation and duration of fixed-term contracts. We show that a labor market with flexibility at the margin'' increases the unemployment volatility with respect to one that is fully regulated. This analysis yields new insights into the interpretation of the recent volatility changes witnessed in the OECD area.

Item Type: Article 10.1111/j.1467-9442.2012.01715.x number of additional authors: 2; Flexibility at the margin; search and matching model; separation costs; volatility H Social Sciences > HB Economic Theory Divisions > Division of Human and Social Sciences > School of Economics Stewart Brownrigg 07 Mar 2014 00:05 UTC 16 Feb 2021 12:52 UTC https://kar.kent.ac.uk/id/eprint/40242 (The current URI for this page, for reference purposes)