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Le "risque judiciaire" et les licenciements en France: le point de vue de l'économie du risque
[The "judicial risk" and lay-offs in France from the point of view of the economics of uncertainty]

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  • Langlais, Eric

Abstract

Does dismissal law create a "judicial risk" to which french firms are exposed? The paper discusses the different arguments (Blanchard and Tirole (2003), Cahuc and Kramarz (2004), Munoz-Perez and Serverin (2005)) using the empirical available evidence together with basic tools in economics of uncertainty. We show that data on jugement appeals in front of Prud'Hommes suggest that employees exhibit a less risk averse attitude (and to the limit, they behave in fact in a risk seeking way) than usually observed on markets for risk (such as financial or insurance markets). On the other hand, we show that the motive called in french dismissal law "personal motive" is not perceived as better than the "economic motive" soon as firms are supposed to behave in a risk averse way. Conversally, when we compare the expected cost of a dismissal associated to each motive, we find that the result of the comparison is very sensible to the employee' seniority, to the rejection rate of employees' demand in front of the Prud'Hommes, and/or to the indirect cost of the dismissal.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 8845.

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Date of creation: Mar 2008
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Handle: RePEc:pra:mprapa:8845

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Keywords: dismissal law; Prud'Hommes; judicial risk;

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  1. Kramarz, Francis & Michaud, Marie-Laure, 2003. "The Shape of Hiring and Separation Costs," CEPR Discussion Papers 3685, C.E.P.R. Discussion Papers.
  2. Tversky, Amos & Kahneman, Daniel, 1992. " Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
  3. Andrea Ichino & Michele Polo & Enrico Rettore, . "Are Judges Biased by Labor Market Conditions?," Working Papers 192, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  4. Farber, Henry S & Bazerman, Max H, 1987. "Why Is There Disagreement in Bargaining?," American Economic Review, American Economic Association, vol. 77(2), pages 347-52, May.
  5. Farmer, Amy & Pecorino, Paul, 2002. "Pretrial bargaining with self-serving bias and asymmetric information," Journal of Economic Behavior & Organization, Elsevier, vol. 48(2), pages 163-176, June.
  6. John M. Abowd & Francis Kramarz, 1997. "The Costs of Hiring and Separations," NBER Working Papers 6110, National Bureau of Economic Research, Inc.
  7. Tversky, Amos & Wakker, Peter, 1995. "Risk Attitudes and Decision Weights," Econometrica, Econometric Society, vol. 63(6), pages 1255-80, November.
  8. Farmer, Amy & Pecorino, Paul, 1994. "Pretrial negotiations with asymmetric information on risk preferences," International Review of Law and Economics, Elsevier, vol. 14(3), pages 273-281, September.
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