Arbeitspapier

The Plaintiff's role in enforcing a court ruling: Evidence from a labor court in Mexico

We analyze the outcomes of 332 cases from a labor court in Mexico in which a judge awarded money to a plaintiff who claimed to have been fired by a firm without cause. The judgments were enforced in only 40% of the cases. A plaintiff may try to enforce a judgment by petitioning the court to seize the firm's assets when the firm refuses to pay. Thirty eight percent of the enforced judgments required at least one seizure attempt. We estimate the parameters of post judgment games in which the worker does not know if a seizure attempt would ultimately succeed and show that these models explain the data well. We then simulate the effects of a policy that reduces worker costs of a seizure attempt. We find that this policy would increase the probability of enforcement, either by increasing the probability that the worker attempts an asset seizure or by inducing firms to pay voluntarily to avoid such seizure attempts. However, reducing worker costs of seizure attempts can only have a modest effect on enforcement probabilities because a high percentage of firms are able to avoid payment in spite of worker efforts to force collection.

Language
Englisch

Bibliographic citation
Series: IDB Working Paper Series ; No. IDB-WP-264

Classification
Wirtschaft
Unemployment Insurance; Severance Pay; Plant Closings
Labor Law
Litigation Process
Subject
Labor Courts
Mexico
Severance Payments
Enforcement of Labor Law

Event
Geistige Schöpfung
(who)
Kaplan, David S.
Sadka, Joyce
Event
Veröffentlichung
(who)
Inter-American Development Bank (IDB)
(where)
Washington, DC
(when)
2011

Handle
Last update
10.03.2025, 11:41 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Kaplan, David S.
  • Sadka, Joyce
  • Inter-American Development Bank (IDB)

Time of origin

  • 2011

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