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Firing Notification Procedures and Wage Growth

In: The Economics and Regulation of Digital Markets

Author

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  • Nicolae Stef
  • Anthony Terriau

Abstract

We investigate how firing notification procedures influence wage growth. Using a sample of 33 countries over the period 2006–2015, we show that administrative requirements in cases of dismissal have a positive and significant effect on wage growth. The result is robust even after controlling for the endogeneity of the firing notification restrictions, the involvement of third parties in the wage bargaining process, the minimum wage, the firms' training policy, and the composition of employment. These findings suggest that firing notification procedures foster the growth of wages by increasing the bargaining power of incumbent workers.

Suggested Citation

  • Nicolae Stef & Anthony Terriau, 2023. "Firing Notification Procedures and Wage Growth," Research in Law and Economics, in: The Economics and Regulation of Digital Markets, volume 31, pages 121-146, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:rlwezz:s0193-589520240000031006
    DOI: 10.1108/S0193-589520240000031006
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    More about this item

    Keywords

    Wages; employment protection; firing costs; firing notifications; firing restrictions; worker termination; C23; J31; J38; J63;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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