Lobbying and dismissal dispute resolution systems

The Detrimental Effect of Job Protection on Employment: Evidence from France

“…However, it does not analyze the empirical relation between provisions of employment protection legislation and the layoff costs to the employers. This issue is nevertheless very important as it is clear that the impact of employment protection legislation on layoff costs depends, among other elements, on its interpretation by labor courts, on the length, the cost and the uncertainty of the legal process (Bertola et al, 1999;Ichino et al, 2003;Galdon Sanchez and Guell, 2003;Garibaldi and Violante, 2005;Besancenot and Vranceanu, 2009;Goerke and Neugart, 2015). We complement this literature by using original data about severance payments gathered from more than 27,000 court rulings and by providing a framework that links provisions of the employment protection legislation to the actual layoff costs.…”