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Quit behavior and the role of job protection

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  • Gielen, Anne C.
  • Tatsiramos, Konstantinos

Abstract

Job protection reduces job turnover by changing firms' hiring and firing decisions. Yet the effect of job protection on workers' quit decisions and post-quit outcomes is still unknown. We present the first evidence using individual panel data from 12 European countries, which differ both in worker turnover rates and in the level of job protection. We find that workers are less likely to quit their job in countries with more job protection, and those workers who quit receive higher wages compared to stayers. This evidence can be explained by increased mobility costs associated with higher expected risk of post-quit layoff and job mismatch.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 19 (2012)
Issue (Month): 4 ()
Pages: 624-632

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Handle: RePEc:eee:labeco:v:19:y:2012:i:4:p:624-632

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Web page: http://www.elsevier.com/locate/labeco

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Keywords: Institutions; Employment protection; Labor mobility; Job satisfaction; Wages;

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Citations

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Cited by:
  1. Gielen, Anne C. & Tatsiramos, Konstantinos, 2012. "Quit Behavior and the Role of Job Protection," IZA Discussion Papers 6540, Institute for the Study of Labor (IZA).
  2. Bassanini, Andrea & Garnero, Andrea, 2012. "Dismissal Protection and Worker Flows in OECD Countries: Evidence from Cross-country/Cross-industry Data," CEPREMAP Working Papers (Docweb) 1211, CEPREMAP.
  3. Liina Malk, 2013. "Relaxation of employment protection and its effects on labour reallocation," Bank of Estonia Working Papers wp2013-4, Bank of Estonia, revised 04 Jun 2013.
  4. Nikolaos Georgantzis & Efi Vasileiou, 2012. "Are dangerous jobs paid better? European evidence," Working Papers 2012/18, Economics Department, Universitat Jaume I, Castellón (Spain).

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