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The Costs of Wrongful-Discharge Laws

David H. Autor¹; John J. Donohue²; Stewart J. Schwab^3,4

¹ MIT Department of Economics and NBER · ² Yale University · ³ Cornell University · ⁴ College of Law

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.

DOI

10.1162/rest.88.2.211

Volume

88 (2)

Pages

211-231

Language

en

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BibTeX

Sources

crossref openalex