Abstract:
Evaluating the effect of legal rules using economic analysis is one of the most important areas of application for empirical analyses of law and economics. The present study addresses the evaluation of one of the important topics raised in the second chapter of the Labor Law, namely how to terminate an employment contract through the dismissal of a worker. Economic analysis of legal rules usually begins with the 'Coase Theorem,' but given various interpretations based on this theorem, it is not possible to comment in advance on the efficiency of labor law regulations. Due to the ambiguity of theoretical patterns, the magnitude and direction of job security's impact on employment must be determined empirically. Calculating the Job Security (SJ) index, which specifically focuses on dismissal costs, shows that in Iran, after the approval of the current Labor Law, the value of this index increased nearly twofold compared to the 1337 Labor Law. Estimating the effect of said regulations on different demographic subgroups through a specified probit model indicates that the imposition of job security regulations in their current form is to the detriment of employment for the youth age group and the low-skill group.
Machine summary:
Calculating the Job Security (SJ) index, which specifically focuses on dismissal costs, shows that in Iran, after the approval of the current Labor Law, the value of this index increased nearly twofold compared to the 1337 Labor Law. Estimating the effect of these regulations on different demographic subgroups through specifying a probit model indicates that the imposition of job security regulations in their current form is to the detriment of employment for the youth age group and the low-skill group.
hcaorppA cimonocE dna wal Despite the extensive criticisms from stakeholders and researchers regarding the regulations related to job security in the Iranian Labor Law, research conducted in the country has mostly been carried out through field studies (forming a selected statistical community and obtaining their opinions regarding the aforementioned regulations).
First, paying attention to the aspect of costs resulting from the imposition of job protection regulations in general, and the restriction on dismissing workers in particular, does not mean that the benefits or advantages of implementing labor protection policies are meager or useless.
Although it is mentioned in this study that the provisions of the labor law regarding the dismissal of workers have created limitations for employers regarding the dismissal of workers during periods of economic recession in the country (Karimi, 1382); this conclusion is not based on quantitative evaluation, and its results are not consistent with the study conducted on the factors affecting labor demand in large industrial workshops (Amini and Pezhouyan, 1382).
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