Laws on hiring and firing are intended to protect workers from unfair behavior by employers, to counter imperfections in financial markets that limit workers' ability to insure themselves against job loss, and to preserve firm-specific human capital. But by imposing costs on firms' adaptation to...

Employment protection legislation aims to shield employees against unfair dismissal and earning reductions at the time of job loss. Theory suggests that employment protection stabilizes employment over cyclical upturns and downturns without necessarily increasing general unemployment. However,...

The paper analyses the arbitration of dismissal disputes by Australian labour courts over a 15 years' time span characterized by two major legal reforms to unfair dismissal statutes. We isolate two channels by which we think the social values of the Federal government affected the decisions of...

This paper tests whether the job security offered by stricter employment protection legislation (EPL) undermines positive compensating wage differentials that would otherwise be paid. Specifically, we ask whether industries with relatively more need for layoffs and labour flexibility have lower...

This paper presents and discusses new data on employment protection legislation (EPL) in the successor states of the former USSR - the CIS and Baltic states - over 25 years from 1985 to 2009. We use the OECD methodology (OECD EPL, version II) for assessing the strictness of national labor laws...

Workers value job security. If at least some workers value it enough, then it is efficient for at least some firms to adopt policies in which they commit (implicitly or explicitly) not to dismiss employees except for “just-cause,” as opposed to policies in which employers are free to dismiss...

The paper analyses the arbitration of dismissal disputes by Australian labour courts over a 15 years' time span characterized by two major legal reforms to unfair dismissal statutes. We isolate two channels by which we think the social values of the Federal government affected the decisions of...

Labor courts may introduce a significant wedge between “legal” firing costs and “effective” (post-trial) firing costs. Apart from procedural costs, there is uncertainty over judges' rulings, in particular over the likelihood of a “fair” dismissal ultimately being ruled as...

Using manufacturing data for India, this paper studies the economic effects of legal amendments on two types of labor laws: employment protection and labor dispute resolution legislation. We find that laws that increase employment protection or the cost of labor disputes substantially reduce...

The paper analyses the method adopted by the index of employment protection systems developed in 1999 by the OECD and discusses its reliability and shortcomings, in particular with regards to Italy. The paper highlights a series of problems of method arising from the aggregation of the...