Pierre Cahuc, da Science Po, vai apresentar “Judge Bias and in Labor Courts and Firm Performance”.

Judge Bias in Labor Courts and Firm Performance

Does judge subjectivity in labor courts influence firm performance? We study the
economic consequences of judge decisions by collecting information on 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, defined as judge-specific differences on granting compensation for wrongful
dismissal, has statistically significant effects on the survival and employment of small
firms, especially among very small and low-performing ones. When compensation
for wrongful dismissal is instrumented by judge bias, an increase in compensation of
1 percent of the payroll reduces employment growth by 5 percentage points after 3
years for those firms.