The effect of trial periods in employment on firm hiring behavior

Recent changes in New Zealand law decreased the cost of dismissing employees within their first 3 months with an employer, with the aim of encouraging firms to increase hiring by reducing the associated risk. We use monthly linked employer–employee data and exploit the staggered introduction of the policy to estimate its effect on hiring. We find that the policy had little effect on the number of hires, the hiring of jobseekers of unknown quality, or the stability of employment. Our results suggest that policies that temporarily lower dismissal costs do not necessarily increase firm hiring.

Before It Gets Better: The Short-Term Employment Costs of Regulatory Reforms

The article exploits long time series of industry-level data in a group of OECD countries to analyze the short-term labor market effects of reforms that lower barriers to entry and dismissal costs. Estimates show that both policies induce non-negligible transitory employment losses. The strength of these effects varies depending on the underlying industry and labor market structure, and on cyclical conditions: The employment cost of deregulation is higher in economic downturns and negligible in good times. These findings prove robust to a set of specification and sensitivity checks and are confirmed after standard reverse causality and falsification tests.

OPTIMAL MANPOWER PLANNING DECISION WITH SINGLE EMPLOYEE TYPE CONSIDERING MINIMAL EMPLOYMENT PERIOD CONSTRAINT

In this paper, we investigate a manpower planning problem with single employee type over a long planning horizon. The dynamic demand for manpower must be fulfilled by allocating enough number of employees and each employee has a minimal employment period. A cost objective is concerned where the costs for every employee include salary, recruitment and dismissal costs, in particular, setup cost when recruitment activity occurs in one period. In this paper we first formulate the problem as a dynamic programming model. Then we derive properties of the problem and propose an algorithm to minimize the total manpower-related cost over the entire planning horizon. Next we discuss the influence on the optimal states of changing some parameters and provide the sensitivity analysis of the optimal states concerning the future demands. Finally, we report computational results to illustrate the correctness of the approach and to analyze the influence on the optimal states of changing parameters or changing future demands.