Frisch seminar: Dinara Alpysbayeva
Labor market rigidities and misallocation
Abstract: This paper estimates the impact of labor market rigidities on labor misallocation. To this end, we use a recent policy change in Belgium, leading to an increase in employment protection for blue-collar workers and a decrease in employment protection for white-collar workers. Using a rich data set of the universe of Belgian firms, the findings indicate that the policy lowered the allocative efficiency of blue-collar intensive firms.