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'Take It or Go to Court': The Impact of Sec. 1a of the German Protection Against Dismissal Act on Severance Payments

Identifieur interne : 001A83 ( Istex/Corpus ); précédent : 001A82; suivant : 001A84

'Take It or Go to Court': The Impact of Sec. 1a of the German Protection Against Dismissal Act on Severance Payments

Auteurs : Laszlo Goerke ; Markus Pannenberg

Source :

Review of Law & Economics [ 1555-5879 ] ; 2011-12-30.

RBID : ISTEX:C13F9ED07B1C91DC5BFB7FEEF75D26607681FB50

Abstract

In 2004, a section was added to the German Protection against Dismissal Act, establishing a new procedure to dismiss an employee, given a predetermined severance payment. Most legal scholars presume the change to be without impact, while a minority of experts claims it to be either beneficial or unfavorable to employees. Our theoretical model suggests that firms will use the new procedure, but that the change in payoffs is indeterminate and, therefore, an empirical issue. Exploiting the fact that collective dismissals are not directly affected by the amendment, difference-in-differences estimates based on panel data for West Germany indicate that the legal change did have a negative effect on severance pay.

Url:

https://api.istex.fr/document/C13F9ED07B1C91DC5BFB7FEEF75D26607681FB50/fulltext/pdf

DOI: 10.2202/1555-5879.1519

Links to Exploration step

ISTEX:C13F9ED07B1C91DC5BFB7FEEF75D26607681FB50

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'Take It or Go to Court': The Impact of Sec. 1a of the German Protection Against Dismissal Act on Severance Payments

'Take It or Go to Court': The Impact of Sec. 1a of the German Protection Against Dismissal Act on Severance Payments

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