Chapter 1: What we know (and don’t know) about how employment protection law affects employment
This book aims to describe and theorize “enterprise law,” a concept that encompasses all of the private contracts and public regulations that affect shareholders, creditors, management, and employees as they participate in a business enterprise. Each chapter explores how markets, contracts, social norms, and legislation interact to create incentives for these various actors. The resulting incentives influence market behavior and play a crucial role in determining the optimal configuration of enterprise law. I focus in this chapter on how the constellation of legal rules known as “employment protection law” (EPL) affects the incentive bargain between workers and their employer. Section 1.2 compares the many specific legal constraints on discharge in the US to the more general just-cause standards that prevail elsewhere in the world. Section 1.3 highlights several prominent theoretical and empirical analyses of EPL and identifies the limitations that make those studies ultimately inconclusive. Section 1.4 uses a comparatively simple principal–agent framework to illustrate the fundamental tension between incentives and insurance. Section 1.5 critically reviews some of the most intriguing arguments for adopting a general “just-cause” requirement. Section 1.6 focuses more narrowly on the descriptive flaws and analytical contradictions that undermine one scholar’s behavioral economic approach to employment termination law.
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.