The Demand for Individual Grievance Procedures in Germany and Spain: Labour Law Changes versus Business Cycle

Abstract

In this article, we analyze the determinants of annual number of grievance procedures, mainly individual complaints against unfair dismissals. Econometric analyses using two balanced panels from the 11 West German states (1964-2006) and the 17 autonomous regions of Spain (1987-2006) show that labour market characteristics, such as the unemployment and the vacancy rate have a much stronger influence on the cyclical demand for individual grievance procedures than changes in “workers’ rights”. Thus, the individual costs of unemployment are better predictors of the demand for individual grievance procedures than institutional changes strengthening or weakening employees’ rights.