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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.

Suggested Citation

  • Gielen, Anne C. & Tatsiramos, Konstantinos, 2012. "Quit behavior and the role of job protection," Labour Economics, Elsevier, vol. 19(4), pages 624-632.
  • Handle: RePEc:eee:labeco:v:19:y:2012:i:4:p:624-632
    DOI: 10.1016/j.labeco.2012.05.002
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    Cited by:

    1. repec:eme:rleczz:s0147-9121(2013)0000038005 is not listed on IDEAS
    2. Bassanini, Andrea & Garnero, Andrea, 2013. "Dismissal protection and worker flows in OECD countries: Evidence from cross-country/cross-industry data," Labour Economics, Elsevier, vol. 21(C), pages 25-41.
    3. Hetschko, Clemens & Chadi, Adrian, 2014. "The Magic of the New: How Job Changes Affect Job Satisfaction," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100329, Verein für Socialpolitik / German Economic Association.
    4. Gielen, Anne C. & Tatsiramos, Konstantinos, 2012. "Quit behavior and the role of job protection," Labour Economics, Elsevier, vol. 19(4), pages 624-632.
    5. Sara Serra, 2015. "Temporary contracts’ transitions: the role of training and institutions," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    6. Sara Serra, 2016. "Temporary contracts' transitions: the role of training and institutions," Working Papers w201611, Banco de Portugal, Economics and Research Department.
    7. Nikolaos Georgantzis & Efi Vasileiou, 2014. "Are Dangerous Jobs Paid Better? European Evidence," Research in Labor Economics,in: New Analyses of Worker Well-Being, volume 38, pages 163-192 Emerald Publishing Ltd.
    8. 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.

    More about this item

    Keywords

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

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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