Statutory firing costs and lay-offs in Canada

Friesen, Jane

doi:10.1016/j.labeco.2003.02.001

Cited by 9 publications

(13 citation statements)

References 32 publications

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“…While employment protection should unambiguously reduce job flows, in many models the theoretical impact of employment protection on employment levels is ambiguous, as higher firing costs reduce both firing and hiring(Bertola 1992). Recent research using worker-or firm-level data show is mixed, although there is some evidence that commonly adopted employment protection may reduce job mobility and employment (for important recent papers in this literature, seeKugler 1999, Hunt 2000, Bauer et al 2007, Friesen 2005, Kugler and Pica 2007, Autor et al 2006, Marinescu 2009). 7 In a series of more recent papers,Autor et al (2004Autor et al ( , 2006Autor et al ( and 2007 reconcile the conflicting findings from prior research and find evidence that one wrongful-discharge provision (i.e., the implied-contract exception) reduced…”

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confidence: 99%

The Effect of Employment Protection on Worker Effort: Evidence from Public Schooling

Jacob

2010

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This paper studies the effect of employment protection on worker productivity and firm output in the context of a public school system. In 2004, the Chicago Public Schools (CPS) and Chicago Teachers Union (CTU) signed a new collective bargaining agreement that gave principals the flexibility to dismiss probationary teachers (defined as those with less than five years of experience) for any reason, and without the elaborate documentation and hearing process typical in many large, urban school districts. Results suggest that the policy reduced annual teacher absences by roughly 10 percent and reduced the prevalence of teachers with 15 or more annual absences by 20 percent. The effects were strongest among teachers in elementary schools and in low-achieving, predominantly African-American high schools, and among teachers with highpredicted absences. There is also evidence that the impact of the policy increased substantially after its first year.

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confidence: 99%

The Effect of Employment Protection on Worker Effort: Evidence from Public Schooling

Jacob

2010

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“…Our empirical strategy exploits the (a) changes in the strength in employment protection over time (i.e., the enactment of LSL in August 1984, the setting up of CLA in August 1987, and the enactment of LIL in February 1993), (b) sectoral difference in the coverage of EPL (i.e., Taiwan's LSL covered only some industries, which belong to the primary and secondary sectors of industry, and establishments in some industries, which mostly belong to the tertiary sector of industry, are not covered by LSL and are used as the control group), 20 and (c) differences in LSL enforcement intensity for LSLcovered establishments of difference sizes. 21 Accordingly, our empirical model is specified as follows.…”

Section: Empirical Strategy and Resultsmentioning

confidence: 99%

“…[ Table 2 here] 20 More specifically, in our empirical analysis the covered industries include (1) manufacturing, (2) electricity, gas and water, (3) construction, and (4) transportation, storage and communications; and the industries not covered by LSL includes (1) trading, (2) wholesale, retail, traveler accommodation, and eating & drinking places, (3) finance and insurance (where banking and insurance establishments are excluded), (4) real estate, and rental & leasing services, (5) professional, scientific and technical services, (6) health care and social welfare services, (7) cultural, sports, and entertainment & recreation services; and (8) other services. 21 Smaller establishments' LSL compliance was loosely enforced.…”

Section: Empirical Strategy and Resultsmentioning

confidence: 99%

The Effects of Employment Protection on Labor Turnover: Empirical Evidence From Taiwan

Kan

Lin

2011

Economic Inquiry

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This paper investigates the effects of employment protection legislation on the rates of hiring, separation, worker flows, job reallocation, and churning flows for the case of Taiwan. Our empirical identification takes advantage of a reform created by Taiwan's enactment of Labor Standards Law, which has substantially increased the costs of firing, and the implementation of the law's enforcement measures. Moreover, our identification also exploits the fact that the stringency of the law's provisions and the intensity of the law's enforcement vary with establishment size. Based on monthly data at the establishment level for the period 1983-1995, we find that Taiwan's Labor Standards Law and its enforcement measures have dampened labor turnover for mediumsized and large establishments, while that of small establishments was not affected.

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“…There is a literature, complementary to the studies cited here, that analyzes the effects of SP on employment flows. In work subsequent to her 1996 paper, Friesen [2005] reports that severance pay laws have little impact on the flows into and out of employment in Canada. In his study, Martins [2009] also assesses the impact of the reform on worker turnover rates, and finds that the effects are not statistically significant.…”

Section: Discussionmentioning

confidence: 99%

Labor-market frictions, incomplete insurance and severance payments

Lalé

2019

Review of Economic Dynamics

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We analyze the effects of government-mandated severance payments in a rich life-cycle model with search-matching frictions in the labor market, risk-averse agents and imperfect insurance against idiosyncratic shocks. Our model emphasizes a tension between worker-firm bargains and consumption smoothing: entry wages are tilted downwards as a response to future severance payments, which runs counter to having a smooth consumption path. Consequently, we find that severance payments produce mostly negative welfare effects. We use the model to characterize the determinants of these welfare losses. We show that even when optimized jointly with unemployment insurance benefits, large government-mandated severance payments should be avoided.

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Statutory firing costs and lay-offs in Canada

Cited by 9 publications

References 32 publications

The Effect of Employment Protection on Worker Effort: Evidence from Public Schooling

The Effect of Employment Protection on Worker Effort: Evidence from Public Schooling

The Effects of Employment Protection on Labor Turnover: Empirical Evidence From Taiwan

Labor-market frictions, incomplete insurance and severance payments

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