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Discussion Paper Details

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Title: Employment Protection Legislation, Labor Courts, and Effective Firing Costs

Author(s): Juan F Jimeno, Marta Mart�nez-Matute and Juan Mora

Publication Date: January 2018

Keyword(s): Employment protection legislation, firing costs and Unemployment

Programme Area(s): Labour Economics

Abstract: Labor courts may influence firing costs. Apart from the procedural costs, there is the likelihood that labor courts declare firings as unfair or nil, which significantly increase severance payments over those established for fair dismissals by Employment Protection Legislation. In this paper we model the determinants of the wedge between mandated and effective firing costs arising from labor courts resolution of dismissals, and show how it is affected by EPL reforms, looking at recent EPL reforms in Spain (implemented in 2010 and 2012) that significantly widened the definition of fair economic dismissals.

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Bibliographic Reference

Jimeno, J, Mart�nez-Matute, M and Mora, J. 2018. 'Employment Protection Legislation, Labor Courts, and Effective Firing Costs'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=12554