Judge Bias in Labor Courts and Firm Performance

By Pierre Cahuc, Stéphane Carcillo, Berengere Patault, Flavien Moreau

February 12, 2021

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Format: Chicago

Pierre Cahuc, Stéphane Carcillo, Berengere Patault, and Flavien Moreau. Judge Bias in Labor Courts and Firm Performance, (USA: International Monetary Fund, 2021) accessed December 25, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Does labor court uncertainty and judge subjectivity influence firms’ performance? We study the economic consequences of judge decisions by collecting information on more than 145,000 Appeal court rulings, combined with administrative firm-level records covering the whole universe of French firms. The quasi-random assignment of judges to cases reveals that judge bias has statistically significant effects on the survival, employment, and sales of small low-performing firms. However, we find that the uncertainty associated with the actual dispersion of judge bias is small and has a non-significant impact on their average outcomes.

Subject: Economic and financial statistics, Employment, Labor, Return on investment, Wages

Keywords: Appeal court rulings database, Dismissal compensation, Firm survival, Firm's employment, Judge bias, Judge level, Pro-worker bias, WP

Publication Details

Pages:

72
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/031
Stock No:

WPIEA2021031
ISBN:

9781513569383
ISSN:

1018-5941

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