This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. American Economic Review
  4. June 2002
  5. Litigation Costs and Returns to Experience

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Litigation Costs and Returns to Experience

  • Paul Oyer
  • Scott Schaefer
American Economic Review
vol. 92, no. 3, June 2002
(pp. 683–705)
Download Full Text PDF

Abstract

We develop a model linking maximum damage awards available to plaintiffs in wrongful termination lawsuits, workers' propensity to sue as a function of experience, and returns to experience. Using Equal Employment Opportunity Commission data on protected-worker discrimination complaints and labor-market data from the Current Population Survey, we examine how returns to experience among protected workers changed around the passage of the Civil Rights Act of 1991. We show that employers' reactions to employment protections may induce redistributive effects. Furthermore, these effects operate not merely across groups of differing protected status, but also within groups of identical protected status. (JEL D21, J31, J71, K31)

Citation

Oyer, Paul, and Scott Schaefer. 2002. "Litigation Costs and Returns to Experience ." American Economic Review, 92 (3): 683–705. DOI: 10.1257/00028280260136318

JEL Classification

  • J71 Labor Discrimination
  • K41 Litigation Process
  • J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
  • J63 Labor Turnover; Vacancies; Layoffs
  • M51 Personnel Economics: Firm Employment Decisions; Promotions
  • J31 Wage Level and Structure; Wage Differentials