'Take It or Go to Court': The Impact of Sec. 1a of the German Protection Against Dismissal Act on Severance Payments
Laszlo Goerke () and
Additional contact information
Pannenberg Markus: IAAEG, Universität Trier; IZA, Bonn; and CESifo, München University of Applied Sciences Bielefeld; DIW Berlin; and IZA, Bonn
Review of Law & Economics, 2011, vol. 7, issue 2, 377-404
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.
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
https://www.degruyter.com/view/j/rle.2011.7.issue- ... .1519.xml?format=INT (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.
Working Paper: 'Take it or Go to Court' - The Impact of Sec. 1a of the German Protection against Dismissal Act on Severance Payments - (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bpj:rlecon:v:7:y:2011:i:2:n:3
Ordering information: This journal article can be ordered from
Access Statistics for this article
Review of Law & Economics is currently edited by Francesco Parisi
More articles in Review of Law & Economics from De Gruyter
Series data maintained by Peter Golla ().