Historically, young French workers (under age 25) have had relatively high unemployment rates: 21 percent in...

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Historically, young French workers (under age 25) have had relatively high unemployment rates: 21 percent in 2005. In 2006, the French government proposed to allow employers to fire young employees without cause (eliminating a labor restriction). ● ● How should this policy improve employment prospects for young French workers? Consider labour market diagram below with labour supply (L and L) and labour demand (LD and LD) curves. Suppose that the French labour market for young workers is initially in equilibrium at one of the four points, a, b, c, or d (you have to chose one of the points). Using the diagram explain how the policy change would impact the wages of young workers. In your explanation refer to shifts in the labour supply and demand curves and why the equilibrium is moving from the initial equilibrium marked by one of the dots to the final equilibrium marked by one of the other dot. No need for you to draw a new graph. Wage a L₂ C LD L LD Employment Historically, young French workers (under age 25) have had relatively high unemployment rates: 21 percent in 2005. In 2006, the French government proposed to allow employers to fire young employees without cause (eliminating a labor restriction). ● ● How should this policy improve employment prospects for young French workers? Consider labour market diagram below with labour supply (L and L) and labour demand (LD and LD) curves. Suppose that the French labour market for young workers is initially in equilibrium at one of the four points, a, b, c, or d (you have to chose one of the points). Using the diagram explain how the policy change would impact the wages of young workers. In your explanation refer to shifts in the labour supply and demand curves and why the equilibrium is moving from the initial equilibrium marked by one of the dots to the final equilibrium marked by one of the other dot. No need for you to draw a new graph. Wage a L₂ C LD L LD Employment

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The policy will improve the employment rate and reduce unemployment rate of the young French workers ... View the full answer