Quit behavior and the role of job protection

Anne Gielen and Konstantinos Tatsiramos

Labour Economics, 2012, vol. 19, issue 4, 624-632

Abstract: Job protection reduces job turnover by changing firms' hiring and firing decisions. Yet the effect of job protection on workers' quit decisions and post-quit outcomes is still unknown. We present the first evidence using individual panel data from 12 European countries, which differ both in worker turnover rates and in the level of job protection. We find that workers are less likely to quit their job in countries with more job protection, and those workers who quit receive higher wages compared to stayers. This evidence can be explained by increased mobility costs associated with higher expected risk of post-quit layoff and job mismatch.

Keywords: Institutions; Employment protection; Labor mobility; Job satisfaction; Wages (search for similar items in EconPapers)
JEL-codes: J28 J62 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:labeco:v:19:y:2012:i:4:p:624-632

DOI: 10.1016/j.labeco.2012.05.002

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