The strategic use of dismissal legislation: an empirical analysis using Spanish data

In this paper, we analyse empirically how the legal framework affects the relationship between labour market conditions and dismissals. We use a pseudo-panel of Spanish data from 1987 to 2001. We find that Labour Law reforms have effects on the use of individual and collective dismissals although such effects are much lower than those related to the business cycle. The results also show a strategic use of the different types of dismissals, distorting the work of those institutions involved in dismissals.