IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/3127.html
   My bibliography  Save this paper

The Evolution of Unjust-Dismissal Legislation in the United States

Author

Listed:
  • Alan B. Krueger

Abstract

In the last decade, state courts in many areas of the United States have ruled in favor of employees alleqing they were improperly dismissed. Many economists have contended that any judical or legislative departure from the employment-at-will doctrine is regressive and inefficient because it restricts employment flexibility and freedom of contact. This paper advances an evolutionary theory of unjust-dismissal leqislation in which employer groups eventually support unjust-dismissal leqislation in response to the threat of large and variable damage awards imposed by the judicial system. Legislation is sought to clearly define property rights and to limit employer liability. In comparison to the common law, the unjust-dismissal laws that have been proposed are likely to result in smaller awards, reduce uncertainty, resolve disputes rapidly, and reduce legal and other transaction costs. An institutional and empirical analysis supports the conclusion that the proposal of unjust-dismissal leqislation is a response to court rulings that weaken and obfuscate the employers' right to dismiss employees at will. This evidence is inconsistent with the conventional political-economy view of unjust-dismissal leqislation.

Suggested Citation

  • Alan B. Krueger, 1989. "The Evolution of Unjust-Dismissal Legislation in the United States," NBER Working Papers 3127, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:3127
    Note: LS
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w3127.pdf
    Download Restriction: no

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peter Kuhn, "undated". "Canada and the "OECD Hypothesis": Does Labour Market Inflexibility Explain Canada's High Level of Unemployment?," Canadian International Labour Network Working Papers 10, McMaster University.
    2. Susan N. Houseman, 2001. "Why Employers Use Flexible Staffing Arrangements: Evidence from an Establishment Survey," ILR Review, Cornell University, ILR School, vol. 55(1), pages 149-170, October.
    3. David H. Autor, 2001. "Why Do Temporary Help Firms Provide Free General Skills Training?," The Quarterly Journal of Economics, Oxford University Press, vol. 116(4), pages 1409-1448.
    4. David H. Autor, 2003. "Outsourcing at Will: The Contribution of Unjust Dismissal Doctrine to the Growth of Employment Outsourcing," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 1-42, January.
    5. Andrew Weiss & Ruqu Wang, 1990. "A Sorting Model of Labor Contracts: Implications for Layoffs and Wage-Tenure Profiles," NBER Working Papers 3448, National Bureau of Economic Research, Inc.
    6. David H. Autor, 2000. "Outsourcing at Will: Unjust Dismissal Doctrine and the Growth of Temporary Help Employment," JCPR Working Papers 153, Northwestern University/University of Chicago Joint Center for Poverty Research.
    7. Rebitzer, James B & Robinson, Michael D, 1991. "Employer Size and Dual Labor Markets," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 710-715, November.
    8. Adriana Kugler, 1999. "The Impact of Firing Costs on Turnover and Unemployment: Evidence from the Colombian Labour Market Reform," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 389-410, August.
    9. David H. Autor & John J. Donohue & Stewart J. Schwab, 2006. "The Costs of Wrongful-Discharge Laws," The Review of Economics and Statistics, MIT Press, vol. 88(2), pages 211-231, May.
    10. Lewis M. Segal & Daniel G. Sullivan, 1997. "The Growth of Temporary Services Work," Journal of Economic Perspectives, American Economic Association, vol. 11(2), pages 117-136, Spring.
    11. repec:eee:labchp:v:3:y:1999:i:pb:p:2291-2372 is not listed on IDEAS
    12. Wang, Ruqu & Weiss, Andrew, 1998. "Probation, layoffs, and wage-tenure profiles: A sorting explanation," Labour Economics, Elsevier, vol. 5(3), pages 359-383, September.
    13. Ichino, Andrea & Muehlheusser, Gerd, 2008. "How often should you open the door?: Optimal monitoring to screen heterogeneous agents," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 820-831, September.
    14. Kyota Eguchi, 2000. "Employment Protection Regulations and New Hiring," CIRJE F-Series CIRJE-F-88, CIRJE, Faculty of Economics, University of Tokyo.
    15. Jaap H. Abbring & Gerard J. van den Berg & Pieter A. Gautier & A. Gijsbert C. van Lomwel & Jan C. van Ours & Christopher J. Ruhm, 1998. "Displaced Workers in the United States and the Netherlands," Tinbergen Institute Discussion Papers 98-084/3, Tinbergen Institute.
    16. Addison, John T., 2006. "Politico-Economic Causes of Labor Regulation in the United States: Rent Seeking, Alliances, Raising Rivals' Costs (Even Lowering One's Own?), and Interjurisdictional Competition," IZA Discussion Papers 2381, Institute for the Study of Labor (IZA).
    17. Adriana D. Kugler, 2004. "The Effect of Job Security Regulations on Labor Market Flexibility. Evidence from the Colombian Labor Market Reform," NBER Chapters,in: Law and Employment: Lessons from Latin America and the Caribbean, pages 183-228 National Bureau of Economic Research, Inc.
    18. James B. Rebitzer & Lowell J. Taylor, 1991. "Work Incentives and the Demand for Primary and Contingent Labor," NBER Working Papers 3647, National Bureau of Economic Research, Inc.
    19. MacLeod, W. Bentley & Nakavachara, Voraprapa, 2006. "Legal Default Rules: The Case of Wrongful Discharge Laws," IZA Discussion Papers 1970, Institute for the Study of Labor (IZA).
    20. Adriana D. Kugler & Gilles Saint Paul, 2000. "Hiring and firing costs, adverse selection and long-term unemployment," Economics Working Papers 447, Department of Economics and Business, Universitat Pompeu Fabra.
    21. Ioana Marinescu, 2009. "Job Security Legislation and Job Duration: Evidence from the United Kingdom," Journal of Labor Economics, University of Chicago Press, vol. 27(3), pages 465-486, July.

    More about this item

    JEL classification:

    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:3127. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.