Dismissal Protection and Worker Flows in Small Establishments
Thomas K. Bauer
Rhine-Westphalia Institute for Economic Research (RWI-Essen); University of Bochum - Faculty of Economics; Institute for the Study of Labor (IZA)
Institute for the Study of Labor (IZA); Centre for European Economic Research (ZEW)
Government of the Federal Republic of Germany - Institute for Employment Research (IAB)
CEPR Discussion Paper No. 4379
Based on a large employer-employee matched dataset, the Paper investigates the effects of variable enforcement of German dismissal protection legislation on the employment dynamics in small establishments. Specifically, using a difference-in-differences approach, we study the effect of changes in the threshold scale exempting small establishments from dismissal protection provisions on worker flows. In contrast to the predictions of the theory, our results indicate that there are no statistically significant effects of the dismissal protection legislation on worker turnover.
Number of Pages in PDF File: 39
Keywords: Employment protection, linked-employer-employee dataset, difference-in-differences
JEL Classification: J21, J23, J58
Date posted: June 1, 2004
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