Munich Personal RePEc Archive

Le "risque judiciaire" et les licenciements en France: le point de vue de l'économie du risque

Langlais, Eric (2008): Le "risque judiciaire" et les licenciements en France: le point de vue de l'économie du risque.

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Abstract

Does dismissal law create a "judicial risk" to which french firms are exposed? The paper discusses the different arguments (Blanchard and Tirole (2003), Cahuc and Kramarz (2004), Munoz-Perez and Serverin (2005)) using the empirical available evidence together with basic tools in economics of uncertainty. We show that data on jugement appeals in front of Prud'Hommes suggest that employees exhibit a less risk averse attitude (and to the limit, they behave in fact in a risk seeking way) than usually observed on markets for risk (such as financial or insurance markets). On the other hand, we show that the motive called in french dismissal law "personal motive" is not perceived as better than the "economic motive" soon as firms are supposed to behave in a risk averse way. Conversally, when we compare the expected cost of a dismissal associated to each motive, we find that the result of the comparison is very sensible to the employee' seniority, to the rejection rate of employees' demand in front of the Prud'Hommes, and/or to the indirect cost of the dismissal.

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