Labour distribution affected by firing costs: Bank of Canada paper


The higher the cost to fire permanent staff, the more wage inequality there is between employees, according to a Bank of Canada paper, published on Friday.

Shutao Cao, Enchuan Shao and Pedro Silos, the paper's authors, examine the conditions under which firms and workers decide whether to enter a permanent or a temporary relationship to identify to what extent firing costs help shape the wage distribution. The authors note that firms offer permanent contracts to 'good' matches, as they risk

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