Firing costs, severance payments, judicial mistakes and unemployment

B-Tier
Journal: Labour Economics
Year: 2008
Volume: 15
Issue: 6
Pages: 1162-1178

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In the discussion about employment protection, little attention has been given to judicial mistakes. In most countries, only in the case of dismissals due to economic reasons, the employee is entitled to a severance payment. Given judicial mistakes when reviewing a dismissal, shirkers might falsely receive a severance payment while non-shirker might not. At fighting unemployment, increasing the level of severance payments can increase employment for small judicial mistakes and effectively dominate the pure firing costs which leave ambiguous effects on employment. For large judicial mistakes, the opposite can hold and severance payments can decrease employment.

Technical Details

RePEc Handle
repec:eee:labeco:v:15:y:2008:i:6:p:1162-1178
Journal Field
Labor
Author Count
1
Added to Database
2026-01-29