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Dismissal Costs and Their Impact on Employment: Evidence from Australian Small and Medium Enterprises

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Author Info
BENOIT FREYENS
PAUL OSLINGTON

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Abstract

The influence of labour market regulation on employment is intensely debated across the OECD. In Australia, the focus is currently on the employment impact of recent changes to unfair dismissal provisions. There is surprisingly little research on the magnitude and structure of dismissal costs, and this paper presents new data from a major survey of small- and medium-sized Australian enterprises. Dismissal costs are compared for different types of separations, including redundancy, uncontested fires and complex fires. Using the data and a simple labour demand model, we estimate the direct employment impact of Australia's changes to unfair dismissal protection. The impact is found to be modest. Copyright © 2007 The Economic Society of Australia.

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Article provided by The Economic Society of Australia in its journal Economic Record.

Volume (Year): 83 (2007)
Issue (Month): 260 (03)
Pages: 1-15
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Handle: RePEc:bla:ecorec:v:83:y:2007:i:260:p:1-15

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Oslington, Paul, 2002. "Trade, Wages and Unemployment in the Presence of Hiring and Firing Costs," The Economic Record, The Economic Society of Australia, vol. 78(241), pages 195-206, June. [Downloadable!] (restricted)
  2. Lazear, Edward P, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, MIT Press, vol. 105(3), pages 699-726, August. [Downloadable!] (restricted)
  3. Nickell, S. & Layard, R., 1997. "Labour Market Institutions and Economic Performance," Papers 23, Centre for Economic Performance & Institute of Economics.
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  4. Pfann, Gerald A. & Verspagen, Bart, 1989. "The structure of adjustment costs for labour in the Dutch manufacturing sector," Economics Letters, Elsevier, vol. 29(4), pages 365-371. [Downloadable!] (restricted)
  5. Harding, Don, 2002. "The effect of unfair dismissal laws on small and medium sized businesses," MPRA Paper 43, University Library of Munich, Germany. [Downloadable!]
  6. Lewis, Philip E T & MacDonald, Garry, 2002. "The Elasticity of Demand for Labour in Australia," The Economic Record, The Economic Society of Australia, vol. 78(240), pages 18-30, March. [Downloadable!] (restricted)
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  1. Harding, Don, 2005. "Identifying and measuring the economic effects of unfair dismissal laws," MPRA Paper 3700, University Library of Munich, Germany. [Downloadable!]
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