Employer's Perspective on Hiring in a Rigid Labor Market
In rigid labor markets, such as Spain's, employers face a significant dilemma. While younger workers are often perceived as more creative, technologically skilled, and cost-effective—with managers noting two recent graduates could be hired for the salary of one senior employee—the high costs associated with dismissing long-tenured, union-protected workers act as a major deterrent. The financial burden of severance payments and the risk of union-led strikes can outweigh the potential benefits of hiring new staff. This situation perpetuates a system where protected 'insiders' are retained, making it difficult for 'outsiders' to secure stable employment.
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Introduction to Macroeconomics Course
Ch.2 Unemployment, wages, and inequality: Supply-side policies and institutions - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
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