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Title:Effects of dismissal protection legislation on individual employment stability in Germany PDF Logo
Authors:Boockmann, Bernhard
Gutknecht, Daniel
Steffes, Susanne
Issue Date:2008
Series/Report no.:IAW-Diskussionspapiere 45
Abstract:Changes in Dismissal Protection Legislation in Germany have been a subject to ongoing research in the past decade. The majority of these studies, however, has not been able to determine significant effects on job and worker flows in firms affected by the reforms. We estimate the impact of dismissal protection on individual employment stability using the 1999 reform as a natural experiment.We provide insights into the effects of legislation on the firms' matching behaviour. Our results hint at increased job security after the reform for those spells affected by it. This rise in stability was, however, accompanied by modest instability at start suggesting that firms facing additional firing costs tend to cease probation to shed unproductive job-worker matches. The latter effect, however, was not found to be significant.
Subjects:Dismissal Protection
Job Durations
Difference-in-Differences
JEL:J32
J65
C41
Document Type:Working Paper
Appears in Collections:IAW-Diskussionspapiere, Institut für Angewandte Wirtschaftsforschung (IAW)

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