Labor courts, nomination bias, and unemployment in Germany

Arbeitspapier

Labor courts play an important role in determining the effective level of labor market regulation in Germany, but their application of law may not be even-handed. Based on a simple theoretical model and a new panel data set, we identify a nomination bias in labor court activity - that is, court activity varies systematically with the political leaning of the government that has appointed judges. In an extension, we find a significant positive relation between labor court activity and unemployment, even after controlling for the endogeneity of court activity. The results have potentially important policy implications regarding the independence of the judiciary and labor market reforms.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1752

Classification and Topics

• Classification: Wirtschaft ; Labor-Management Relations; Industrial Jurisprudence ; Labor Law ; Litigation Process ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Berger, Helge ; Neugart, Michael
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/25797
• Last update: 10.03.2025, 11:44 AM CET