Last in,first out?: Estimating the effect of seniority rules in Sweden |
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| Authors: | David von Below Peter Skogman Thoursie |
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| Institution: | 1. Brno Epilepsy Center, First Department of Neurology, St. Anne’s University Hospital and Faculty of Medicine, Masaryk University, Brno, Czech Republic;2. Central European Institute of Technology (CEITEC), Masaryk University, Brno, Czech Republic;3. Brno Epilepsy Center, Department of Child Neurology, Brno University Hospital and Faculty of Medicine, Masaryk University, Brno, Czech Republic;4. Brno Epilepsy Center, Department of Neurosurgery, St. Anne’s University Hospital and Faculty of Medicine, Masaryk University, Brno, Czech Republic;5. Department of Radiology, St. Anne’s University Hospital and Faculty of Medicine, Masaryk University, Brno, Czech Republic;6. First Department of Pathological Anatomy, St. Anne’s University Hospital and Faculty of Medicine, Masaryk University, Brno, Czech Republic;1. Financial Stability Department, Bank of Spain, Alcalá 48, 28014 Madrid, Spain;2. Department of Quantitative Economics, Universidad Complutense de Madrid, Spain;1. Agricultural-, Environmental- and Food Policy, Department of Agricultural and Nutrition Sciences, Martin-Luther-University, Halle-Wittenberg, 06099 Halle, Germany;2. University of Wyoming, 112 W. 2d St., Casper, WY 82601, USA |
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| Abstract: | In this paper we investigate whether a relaxation in seniority rules (the “last-in-first-out” principle) had any effect on firms' employment behaviour. Seniority rules exist in several countries, but consequences of seniority rules on firms' employment behaviour have not been examined previously. The “last-in-first-out” principle in Sweden was reformed in January 2001 such that employers with ten or fewer employees were allowed to exempt two workers from the seniority rule. Using an employer–employee unbalanced panel data for the period 1996–2005, we find that both hires and separations increased in small firms relative to large firms by 5%. This also implies that there were no effects on firms' net employment. Our results show that firms reacted to changes in the seniority rules, but we argue that the effects are not overwhelmingly large. |
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