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Labor courts, nomination bias, and unemployment in Germany

  • Berger, Helge
  • Neugart, Michael

Labor courts play an important role in determining the effective level of labor market regulation in Germany, but their application of law may not be even-handed. Based on a theoretical model of the legal process and a new panel data set, we identify a nomination bias in labor court activity — that is, court activity varies systematically with the political leaning of the government that has appointed judges. In an extension, we find a significant positive relation between labor court activity and unemployment, even after controlling for the endogeneity of court activity.

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Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 27 (2011)
Issue (Month): 4 ()
Pages: 659-673

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Handle: RePEc:eee:poleco:v:27:y:2011:i:4:p:659-673
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505544

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