Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/223342
Authors: 
Batut, Cyprien
Maurin, Eric
Year of Publication: 
2020
Series/Report no.: 
IAAEU Discussion Paper Series in Economics No. 05/2020
Abstract: 
In many countries, the termination of employment contracts has to be either on employer initiative or on employee initiative. In 2008, the French government introduced a change in doctrine: it became possible to terminate employment contracts by mutual consent at a lower cost. We show that the reform was followed by a very significant increase of about 20% in outflow of permanent workers as well as by the replacement of around 10% of dismissals for cause by terminations by mutual consent. By promoting terminations by mutual consent, the reform has improved labor market fluidity and reduced the risks of labor disputes.
Subjects: 
employment termination
dismissal
quit
labor litigation
severance payment
JEL: 
J23
J52
J63
Document Type: 
Working Paper

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