Are Judges Biased by Labour Market Conditions? The Selection of Firing Litigations for Trial in an Italian Firm

Andrea Ichino, Michele Polo and Enrico Rettore

No 2804, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: When a firing litigation is taken to court, only the characteristics of the employees? misconduct should be relevant for the judge?s decision. Using data from an Italian bank this Paper shows that, instead, local labour market conditions influence the court?s decision: the same misconduct episode may be considered sufficient for firing in a tight labour market but insufficient otherwise. This finding is obtained after taking carefully into consideration the non-random selection of firing litigation for trial. The existence of a judge?s bias is relevant for at least two research fields. For macroeconomists it suggests that higher unemployment rates may increase firing costs via the effect on courts? decision criteria; thus, the real extent of firing rigidities cannot be assessed without considering the role of courts. For labour law scholars, this finding is important because, following traditional principles, the law should be applied in the same way for all citizens and over the entire national territory.

Keywords: Internal labour relations; Conflict resolutions; Firing costs (search for similar items in EconPapers)
JEL-codes: J41 J65 (search for similar items in EconPapers)
Date: 2001-05
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://cepr.org/publications/DP2804 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:2804

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP2804

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().