Essays On The Enforcement Of The Employment Protection Legislation

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Economists have traditionally studied the relationships between labor markets and labor legislations paying little attention to the degree and the characteristics of the enforcement of such regulations. This dissertation reports evidence that the enforcement of labor protection legislation impacts job flows and employment rates and that inefficiencies in the resolution of labor disputes being present policy reforms can attenuate them. The first chapter examines the impact of labor market regulations on labor market outcomes through the use of enforcement indicators. Using an original and exhaustive data set of the individual labor disputes that were brought to the labor courts spread over the French territory, the case disposition is found to depend on local economic conditions. An instrumental approach using the institutional setting and the legal environment of the labor courts allows us discovering that the outcomes of the cases, the filing rate and the use of judicial expertise cause fluctuations in labor flows and employment rates. The second chapter explores the existence of a prisoner?s dilemma when workers and firms are involved in labor disputes and face the choice of hiring a lawyer to be represented at trial. Using a representative data set of labour disputes in the UK and a large population of French unfair dismissal cases, we find that a lawyer substantially increases the firm's probability of winning at trial but has little effect on the worker's victory probability. The gain in taking a lawyer for a worker is substantial when the firm is represented. Hiring a lawyer for the firm is beneficial whatever the legal representation of the worker is. This often results in a prisoner's dilemma. The choice of the legal representation of the opposite party, riskaversion and pre-trial bargaining effects, quality of the case and non financial costs play a role in explaining deviation from the equilibrium. Finally, the last chapter uses British data on individual labor disputes to complement the small empirical literature on the impact of the allocation of legal costs on judicial behaviours. A shift from the American rule of allocation of legal costs (each party bears its own costs) to the English one (the losing party pays the legal cost of the winning side) is associated with an increase in the settlement rate of labour disputes in the UK
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