Firing Notification Procedures and Wage Growth

Nicolae Stef and Anthony Terriau

A chapter in The Economics and Regulation of Digital Markets, 2023, vol. 31, pp 121-146 from Emerald Group Publishing Limited

Abstract: We investigate how firing notification procedures influence wage growth. Using a sample of 33 countries over the period 2006–2015, we show that administrative requirements in cases of dismissal have a positive and significant effect on wage growth. The result is robust even after controlling for the endogeneity of the firing notification restrictions, the involvement of third parties in the wage bargaining process, the minimum wage, the firms' training policy, and the composition of employment. These findings suggest that firing notification procedures foster the growth of wages by increasing the bargaining power of incumbent workers.

Keywords: Wages; employment protection; firing costs; firing notifications; firing restrictions; worker termination; C23; J31; J38; J63 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:rlwezz:s0193-589520240000031006

DOI: 10.1108/S0193-589520240000031006

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