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Judge Bias in Labor Courts and Firm Performance

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  • Cahuc, Pierre
  • Carcillo, Stéphane
  • PATAULT, Bérengère
  • Moreau, Flavien

Abstract

Does labor court uncertainty and judge subjectivity influence firms performance? We study the economic consequences of judge decisions by collecting information on more than 145,000 Appeal court rulings, combined with administrative firm-level records covering the whole universe of French firms. The quasi-random assignment of judges to cases reveals that judge bias has statistically significant effects on the survival, employment, and sales of small low-performing firms. However, we find that the uncertainty associated with the actual dispersion of judge bias is small and has a non-significant impact on their average outcomes.

Suggested Citation

  • Cahuc, Pierre & Carcillo, Stéphane & PATAULT, Bérengère & Moreau, Flavien, 2022. "Judge Bias in Labor Courts and Firm Performance," CEPR Discussion Papers 15399, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:15399
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    More about this item

    Keywords

    Labor courts; Employment protection legislation; Employment;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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