This paper studies the role of labor market institutions on unemployment and on the cyclical properties of job flows. We construct an intertemporal general equilibrium model with search unemployment and endogenous job turnover, and examine the consequences of introducing an unemployment benefit, a firing cost and a downward wage rigidity. The simulations suggest that downward wage rigidities, rather than unemployment benefit or firing cost, may well play a dominant role in explaining both the high unemployment rate and the job flows dynamics of such an economy.

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This paper studies the role of labor market institutions on unemployment and on the cyclical properties of job flows. We construct an intertemporal general equilibrium model with search unemployment and endogenous job turnover, and examine the consequences of introducing an unemployment benefit, a firing cost and a downward wage rigidity. The simulations suggest that downward wage rigidities, rather than unemployment benefit or firing cost, may well play a dominant role in explaining both the high unemployment rate and the job flows dynamics of such an economy. Louvain-la-neuveAbstract This paper studies the role of labor market institutions on unemployment and on the cyclical properties of job flows. We construct an intertemporal general equilibrium model with search unemployment and endogenous job turnover, and examine the consequences of introducing an unemployment benefit, a firing cost and a downward wage rigidity. The simulations suggest that downward wage rigidities, rather than unemployment benefit or firing cost, may well play a dominant role in explaining both the high unemployment rate and the job flows dynamics of such an economy.

Nos remerciements vont également à Vincent Merlin et Isabelle Lebon qui nous ont assisté dans la conception des supports de l'expérimentation, Marcellus Harper pour son aide dans la conception de la feuille de calculs utilisée pour le vote alternatif. Enn, cette expérimentation n'aurait pas été possible sans le concours des étudiants et collègues qui nous ont aidé et assisté tout au long de l'expérimentation, en particulier dans la tenue du bureau de vote, nécessitant force de conviction pour convaincre les électeurs de participer et eorts pédagogiques constants pour leur expliquer les règles de vote, pendant toute la journée du scrutin : Myriem Aqel, Tristan Damba, Aurélie Eliazord, Charles Haranis, Philippe Simon et Ibrahima Dia, que nous remercions également. Pour nir, nous n'oublierons pas Jean-François Laslier et ainsi que trois rapporteurs anonymes pour leurs remarques pertinentes qui ont permis d'améliorer la première version de ce papier.

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