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A Level Playing Field: An Optimal Weighting Scheme of Dismissal Protection Characteristics

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  • Michael Kind

Abstract

In the case of collective redundancies, employers are forced to regard certain characteristics when deciding who is going to be dismissed. This paper develops a procedure to derive an empirical based weighting scheme between the characteristics relevant for this selection (age, disability, dependencies and tenure). First, panel data from the German Socio-Economic Panel (SOEP) for the years 1991-2010 is used to estimate, conditional on the existence of dismissal protection, the relationships of the four characteristics with respect to reemployment probabilities and the quality of the new job (measured in terms of wage). Second, the individual valuation of the two outcomes is compared applying a life satisfaction analysis. Finally, based on the empirical results a weighting scheme for the characteristics is proposed, which serves as an evidence based guideline for employers, employees and unions in the process of collective redundancies.

Suggested Citation

  • Michael Kind, 2013. "A Level Playing Field: An Optimal Weighting Scheme of Dismissal Protection Characteristics," SOEPpapers on Multidisciplinary Panel Data Research 597, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp597
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    More about this item

    Keywords

    Dismissal protection; reemployment probability; wage hit;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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