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Labor Disputes and Job Flows


  • Henri Fraisse
  • Francis Kramarz
  • Corinne Prost


Using a data set of individual labor disputes brought to French courts over the years 1996 to 2003, the authors use variations in local conditions of the activity of the labor courts to assess the effect of dismissal costs on the labor market. First, the authors present a simple theoretical framework to explain the links between litigation costs, judicial outcomes, and firing costs. Second, they regress job flows on indicators of judicial outcomes, using an instrument, based on local shocks in the supply of lawyers. They find that when the numbers of lawyers increase, workers litigate more often, which should increase the firing costs for the firms. This increased filing rate causes a large decrease in employment fluctuations, especially for shrinking or exiting firms. The total effect on employment growth is slightly positive, and this result is more sensitive to the adopted specification.

Suggested Citation

  • Henri Fraisse & Francis Kramarz & Corinne Prost, 2015. "Labor Disputes and Job Flows," ILR Review, Cornell University, ILR School, vol. 68(5), pages 1043-1077, October.
  • Handle: RePEc:sae:ilrrev:v:68:y:2015:i:5:p:1043-1077

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    References listed on IDEAS

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    Cited by:

    1. Decio Coviello & Luigi Moretti & Giancarlo Spagnolo & Paola Valbonesi, 2013. "Court Efficiency and Procurement Performance," "Marco Fanno" Working Papers 0164, Dipartimento di Scienze Economiche "Marco Fanno".


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