The Costs of Wrongful-Discharge Laws

By David H. Autor, John J. Donohue, Stewart J. Schwab. Review of Economics and Statistics, 2006

144 citations recorded by the source corpus.

We estimate the effects on employment and wages of wrongful-discharge protections adopted by U.S. state courts during the last three decades. We find robust evidence that one wrongful-discharge doctrine, the implied-contract exception, reduced state employment rates by 0.8% to 1.7%. The initial impact is largest for female and less-educated workers (those who change jobs frequently), while the longer-term effect is greater for older and more-educated workers (those most likely to litigate). By contrast, we find no robust employment or wage effects of two other widely recognized wrongful-discharge laws: the public-policy and goodfaith exceptions.

Subfields: Economics and Econometrics, Pharmacy

View Paper: https://www.semanticscholar.org/paper/092f511e6195cf1748e40345237d114e62c7045b

Citations in the corpus

• Revisiting the Minimum Wage—Employment Debate: Throwing Out the Baby with the Bathwater? (2014, unknown): “Our approach to some extent follows Autor, Donohue, and Schwab (2006).”
• Cash holdings and employee welfare (2013, unknown): “Autor, Donohue, and Schwab (2006) provide a detailed description of these laws. define California, Connecticut, Hawaii, Maine, Minnesota, New Jersey, Oregon, Rhode Island, Vermont, and Washington as states with strong laws on family leave.”
• Dismissals for Cause: The Difference That Just Eight Paragraphs Can Make (2009, unknown): “Autor et al. (2006) document these dierences and use them to evaluate the impact of restrictions on employment at will.”
• Firing Costs and Capital Structure Decisions (2016, unknown): “Second, higher firing costs make it more difficult to reduce employment when firms need to do so, such as during economic downturns (e.g., Bentolila and Bertola (1990), Autor, Donohue, and Schwab (2006), Messina and Vallanti (2007)).”
• Do Employment Protections Reduce Productivity? Evidence from U.S. States (2007, unknown): “3 We summarize these exceptions here and refer the reader to Autor et al. (2006) for an extended discussion.”
• Cash holdings and labor heterogeneity:the role of skilled labor (2017, unknown): “A state can choose to adopt none to all of these exceptions; see Autor, Donohue, and Schwab (2006) for a detailed description of these laws.”
• Do Employment Subsidies Work? Evidence from Regionally Targeted Subsidies in Turkey (2010, unknown): “1 See for example Autor et al. (2006, 2007) or Besley and Burgess (2004).”
• The Real Effect of Smoking Bans: Evidence from Corporate Innovation (2018, unknown): “Data on business combination laws is collected from Bertrand and Mullainathan (2003), and data on the good-faith exception is collected from Autor, Donohue, and Schwab (2006).”