In this paper we investigate whether a relaxation in seniority rules (the "last-in-first-out"-principle) had any effect on firms' employment behaviour. Seniority rules exist in several countries and, like Sweden, most European countries have a more lenient employment protection for firms below a...

Small firms are seen as important drivers of dynamics and innovation. They need to be particularly flexible and be able to react quickly to new challenges. This paper uses the latest change in dismissal protection legislation in Germany as a natural experiment and tries to find causal effects on...