Wages of highly educated workers are affected differently by firing taxes compared to wages of less educated workers. Using a variety of data sources, we evaluate the effects of increasing firing taxes across the United States on wages of high and low-educated workers, in particular, we analyze how changes in the regulation of the employment-at-will across states affected the wages between 1970-1995. Application of quasi-experimental methods yields results suggesting a negative effect for low-educated workers and no significant effects for the highly educated. The standard search and matching model with endogenous search extended to account for two types of agents point as well to a negative effect of the firing costs on wages, with a more pronounced effect for low-educated workers.