The Likely Employment Impact of Removing Unfair Dismissal Protection

Paul Oslington, Ben Freyens

Research output: Contribution to journalArticle

Abstract

Despite intense debate we know very little about dismissal costs. How
large are they? What are the main components and their relative magnitudes? How do they vary across industries and occupations? Does the size of the firm matter? Finally, what impact do dismissal costs have on employment, and what is the likely impact on employment of the proposed changes to unfair dismissal laws? A previous article by Oslington (2005) discussed the current state of knowledge on these questions. This paper uses data from a large scale survey of dismissal costs in Australian small businesses to estimate the impact on employment, in conjunction with a simple neo-classical labour demand model. The impact of unfair dismissal costs on employment is found to be small, certainly much smaller than claimed by the government.
Original languageEnglish
Pages (from-to)56-65
Number of pages10
JournalJournal of Australian Political Economy
Volume56
Publication statusPublished - 2005

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