Job security provisions and employment: Revised estimates

This article provides estimates of the effect of statutory severance pay and notice on four labor market outcome indicators, closely following Lazear (1990) but correcting for errors in his dependent variables and covariates. Although we corroborate the directional influence of severance pay for three of the indicators, there is little to suggest that its contribution to rising unemployment is material. Also contrary to Lazear, longer notice appears to be associated with broadly favorable outcomes.