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    The Costs of Wrongful-Discharge Laws

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    Author
    Autor, David
    Donohue, John
    Schwab, Stewart
    
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    URI
    http://hdl.handle.net/20.500.13051/5474
    Abstract
    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 1.6 percent. The initial impact is largest for female, younger, 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 good-faith exceptions.
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    John M. Olin Center for Studies in Law, Economics, and Public Policy Working Papers

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