Judge Bias in Labor Courts and Firm Performance

Pierre Cahuc, Stéphane Carcillo, Bérengère Patault and Flavien Moreau

Journal of the European Economic Association, 2024, vol. 22, issue 3, 1319-1366

Abstract: This paper documents the existence of judge-specific differences on granting compensation for wrongful dismissal and shows that their consequences are different for small low-performing firms than for other firms. Pro-worker judge bias reduces job creation for all firms, increases the destruction of permanent jobs in small and low-performing firms but reduces it in large high-performing firms. Pro-worker bias reduces employment and survival for small and low-performing firms but has no significant effects on these outcomes for the other firms. The probability that permanent incumbent workers keep their job in firms judged by a pro-worker judge increases in large and high-performing firms, while it decreases in small, poorly performing firms.

Date: 2024
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Related works:
Working Paper: Judge Bias in Labor Courts and Firm Performance (2022)
Working Paper: Judge Bias in Labor Courts and Firm Performance (2022)
Working Paper: Judge Bias in Labor Courts and Firm Performance (2022)
Working Paper: Judge Bias in Labor Courts and Firm Performance (2021)
Working Paper: Judge Bias in Labor Courts and Firm Performance (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:oup:jeurec:v:22:y:2024:i:3:p:1319-1366.

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