Firing Notification Procedures and Wage Growth

Anthony Terriau () and Nicolae Stef
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Anthony Terriau: GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université
Nicolae Stef: GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux - UM - Le Mans Université

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Abstract: 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.

Date: 2023-12-11
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Published in The Economics and Regulation of Digital Markets, Emerald Publishing Limited, pp.121-146, 2023, ⟨10.1108/S0193-589520240000031006⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05470203

DOI: 10.1108/S0193-589520240000031006

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