You know, make it easier to fire them?
Today\’s Nobel Laureate:
Before the 1970’s, similarly short durations but lower flows into unemployment
meant that Europe had lower unemployment rates than the United States. But since
1980, higher durations have kept unemployment rates in Europe persistently higher
than in the U.S. A general equilibrium search model with human capital explains
how these outcomes arise from the way Europe’s higher firing costs and more generous
unemployment compensation make its unemployment rate depend on a parameter that
determines a worker’s loss of valuable skills after an involuntary job loss.
Yup, higher firing costs mean higher unemployment.