Arbeitspapier

Relaxed dismissal protection: effects on the hiring and firing behaviour of small firms

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Small firms are seen as important drivers of dynamics and innovation. They need to be particularly flexible and be able to react quickly to new challenges. This paper uses the latest change in dismissal protection legislation in Germany as a natural experiment and tries to find causal effects on the hiring and firing behaviour of small firms. Using a difference-indifferences approach, I find only small but positive effects on the total number of hirings. However, there are substantial substitution effects from temporary contract hirings to permanent contract hirings. The results remain robust when using count data models and applying fixed effects specifications.

Language
Englisch

Bibliographic citation
Series: Jena Economic Research Papers ; No. 2009,015

Classification
Wirtschaft
Wages, Compensation, and Labor Costs: Public Policy
Labor Law
Business Economics
Subject
Employment protection
small business
worker flows
Kündigungsschutz
Arbeitsmarktflexibilisierung
Klein- und Mittelunternehmen
Arbeitsmobilität
Arbeitsnachfrage
Kündigung
Deutschland

Event
Geistige Schöpfung
(who)
Bauernschuster, Stefan
Event
Veröffentlichung
(who)
Friedrich Schiller University Jena and Max Planck Institute of Economics
(where)
Jena
(when)
2009

Handle
Last update
10.03.2025, 11:44 AM CET

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Object type

  • Arbeitspapier

Associated

  • Bauernschuster, Stefan
  • Friedrich Schiller University Jena and Max Planck Institute of Economics

Time of origin

  • 2009

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