Dismissal Protection and Worker Flows in Small Establishments

38 Pages Posted: 10 Apr 2004

See all articles by Thomas K. Bauer

Thomas K. Bauer

Rhine-Westphalia Institute for Economic Research (RWI-Essen); University of Bochum - Faculty of Economics; IZA Institute of Labor Economics

Holger Bonin

IZA Institute of Labor Economics; ZEW – Leibniz Centre for European Economic Research

Stefan Bender

Government of the Federal Republic of Germany - Institute for Employment Research (IAB)

Multiple version iconThere are 3 versions of this paper

Date Written: April 2004

Abstract

Based on a large employer-employee matched data set, 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.

Keywords: Employment Protection, Linked-Employer-Employee Data Set, Difference-in-Differences

JEL Classification: J21, J23, J58

Suggested Citation

Bauer, Thomas K. and Bonin, Holger and Bender, Stefan, Dismissal Protection and Worker Flows in Small Establishments (April 2004). IZA Discussion Paper No. 1105, RWI Discussion Paper No. 14, Available at SSRN: https://ssrn.com/abstract=525322

Thomas K. Bauer

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

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IZA Institute of Labor Economics ( email )

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Holger Bonin (Contact Author)

IZA Institute of Labor Economics ( email )

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ZEW – Leibniz Centre for European Economic Research

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Stefan Bender

Government of the Federal Republic of Germany - Institute for Employment Research (IAB) ( email )

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