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Dismissal Costs and their Impact on Employment: Evidence from Australian Small and Medium Enterprises

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  • Oslington, Paul
  • Freyens, Ben

Abstract

The influence of labor market regulation on employment and other macroeconomic variables is intensely debated across the OECD. In Australia the focus is currently on the employment impact of proposed changes to unfair dismissal provisions. There is surprisingly little research on the magnitude and structure of dismissal costs and this paper presents new data from a major survey of small- and medium-sized Australian enterprises. Dismissal costs are compared for different types of separations, including redundancy, uncontested fires and complex fires. Using the data and a simple labour demand model we estimate the employment impact of the proposed unfair dismissal changes, which we find likely to be modest.

Suggested Citation

  • Oslington, Paul & Freyens, Ben, 2005. "Dismissal Costs and their Impact on Employment: Evidence from Australian Small and Medium Enterprises," MPRA Paper 961, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:961
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    Cited by:

    1. Joel Isabirye, 2021. "A Thematic Review of the Efficacy of Firms' Responses to Economic Crises: A Ugandan Perspective," Technium Social Sciences Journal, Technium Science, vol. 19(1), pages 311-323, May.
    2. Benoit P. Freyens, 2011. "Dismissal Disputes and the Incentives to Bargain: Estimates of the Contract Zone," ILR Review, Cornell University, ILR School, vol. 64(3), pages 576-598, April.
    3. Productivity Commission, 2006. "The Role of Non-Traditional Work in the Australian Labour Market," Research Papers 0601, Productivity Commission, Government of Australia.
    4. Mark Wooden, 2006. "Implications of Work Choices Legislation," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 13(2), pages 99-116.
    5. Harding, Don, 2005. "Identifying and measuring the economic effects of unfair dismissal laws," MPRA Paper 3700, University Library of Munich, Germany.
    6. Paul Oslington, 2020. "What is an Australian Job Worth?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 53(4), pages 482-493, December.
    7. Benoît Pierre FREYENS, 2010. "Measuring firing costs: The case for direct methods," International Labour Review, International Labour Organization, vol. 149(3), pages 287-313, September.
    8. Benoit Pierre Freyens & Paul Oslington, 2021. "The impact of unfair dismissal regulation: Evidence from an Australian natural experiment," LABOUR, CEIS, vol. 35(2), pages 264-290, June.
    9. Anna Chapman, 2006. "Unfair Dismissal Law and Work Choices: From Safety Net Standard to Legal Privilege," The Economic and Labour Relations Review, , vol. 16(2), pages 237-264, May.
    10. Paul Oslington & Benoit Pierre Freyens, 2013. "A First Look at Incidence and Outcomes of Unfair Dismissal Claims under Fair Work, WorkChoices and the Workplace Relations Act," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 16(2), pages 295-306.
    11. Andreas Dibiasi & Heiner Mikosch & Samad Sarferaz, 2021. "Uncertainty Shocks, Adjustment Costs and Firm Beliefs: Evidence From a Representative Survey," KOF Working papers 21-496, KOF Swiss Economic Institute, ETH Zurich.
    12. Robert Dixon & John Freebairn, 2009. "Models of Labour Services and Estimates of Australian Productivity," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(2), pages 131-142, June.

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    More about this item

    Keywords

    Hiring and Firing; Unfair Dismissal; Redundancy; Survey; Australia;
    All these keywords.

    JEL classification:

    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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