Who Do Companies Fire?

June 25, 2012 in Daily Bulletin, Signature

The perception of companies as soulless creatures might not be entirely accurate writes Bryan Caplan, a study about the firing decisions of employers provides evidence for this:

  • In a study, managers from various countries were given a list of four candidates that differed in age, experience, performance and salary.
  • Older employees were more likely to be fired in countries where they would suffer the least from being fired – and indeed, might even benefit.
  • Other managers would be predisposed to firing younger employees because it would be easier for them to find another job.
  • Under-performers are also fired – because the alternative is to fire those who perform well and that seems unfair.
  • Overall it suggests there is humanity to the way that these decisions are made – and business profitability isn’t the only, or even the most important, motive.

To read all of the data, as well as how the countries differ in their answers to the questions, why economists are likely to reject the study, the methodology of the study, some fascinating graphs, and what this all means, click here.

Source: Library of Economics and Liberty

Via: Marginal Revolution