'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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Laszlo Goerke
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.
©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
Artikel in diesem Heft
- Article
- Introduction: CESifo Conference in Law and Economics - Munich, May 2010
- Damages for Breach of Duty in Corporate Disclosure
- 'Take It or Go to Court': The Impact of Sec. 1a of the German Protection Against Dismissal Act on Severance Payments
- Interjurisdictional Linkages and the Scope for Interventionist Legal Harmonization
- The Law and Economics Analysis of Intellectual Property: Paradigmatic Shift From Incentives to Traditional Property
- Class Actions, Compliance and Moral Cost
- The Law and Economics of Enhancing Cartel Enforcement: Using Information From Non-Cartel Investigations to Prosecute Cartels
- Media and Litigation
- Shooting Rampages and Maintenance of Campus Safety: An Incomplete Contracts Perspective
- Competition, Imitation, and R&D Productivity in a Growth Model with Industry-Specific Patent Protection
Artikel in diesem Heft
- Article
- Introduction: CESifo Conference in Law and Economics - Munich, May 2010
- Damages for Breach of Duty in Corporate Disclosure
- 'Take It or Go to Court': The Impact of Sec. 1a of the German Protection Against Dismissal Act on Severance Payments
- Interjurisdictional Linkages and the Scope for Interventionist Legal Harmonization
- The Law and Economics Analysis of Intellectual Property: Paradigmatic Shift From Incentives to Traditional Property
- Class Actions, Compliance and Moral Cost
- The Law and Economics of Enhancing Cartel Enforcement: Using Information From Non-Cartel Investigations to Prosecute Cartels
- Media and Litigation
- Shooting Rampages and Maintenance of Campus Safety: An Incomplete Contracts Perspective
- Competition, Imitation, and R&D Productivity in a Growth Model with Industry-Specific Patent Protection
