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Firing Notification Procedures and Wage Growth

^aCEREN EA 7477, Burgundy School of Business, Department of Accounting, Finance & Law, Université Bourgogne Franche-Comté, France

^bLe Mans Université, France

The Economics and Regulation of Digital Markets

ISBN: 978-1-83797-644-7, eISBN: 978-1-83797-643-0

Publication date: 11 December 2023

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.

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Acknowledgements

Acknowledgments

The authors acknowledge support from the Bourgogne-Franche-Comté Regional Council. The authors are very grateful to the editor James Langenfeld and to one anonymous referee for insightful and constructive comments.

Citation

Stef, N. and Terriau, A. (2023), "Firing Notification Procedures and Wage Growth", Fagan, F. and Langenfeld, J. (Ed.) The Economics and Regulation of Digital Markets (Research in Law and Economics, Vol. 31), Emerald Publishing Limited, Leeds, pp. 121-146. https://doi.org/10.1108/S0193-589520240000031006

Publisher

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Emerald Publishing Limited