Earnings-related Severance Pay
AbstractIn an efficiency wage economy, lump-sum severance pay from which shirkers can be excluded raises employment. However, severance payments are usually related to wages. It is shown that earnings-related, mandated severance pay will have ambiguous employment effects if effort can be varied continuously. A substitution of the earnings-related for the lump-sum component reduces employment. Thus, the prevalent form of severance payments in OECD countries might have less advantageous employment effects than previously conjectured. Copyright 2006 The Author; Journal compilation 2006 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd..
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by CEIS in its journal LABOUR.
Volume (Year): 20 (2006)
Issue (Month): 4 (December)
Contact details of provider:
Postal: Via Columbia, 2 00133 Roma
Phone: 0039 06 2040234
Fax: 0039 06 2020687
Web page: http://www.blackwellpublishing.com/journal.asp?ref=1121-7081
More information through EDIRC
Other versions of this item:
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
- Akerlof, George A & Yellen, Janet L, 1985. "A Near-rational Model of the Business Cycle, with Wage and Price Intertia," The Quarterly Journal of Economics, MIT Press, vol. 100(5), pages 823-38, Supp..
- Lazear, Edward P, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, MIT Press, vol. 105(3), pages 699-726, August.
- Bentolila, Samuel & Bertola, Giuseppe, 1990. "Firing Costs and Labour Demand: How Bad Is Eurosclerosis?," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 381-402, July.
- Sanfey, Peter J, 1995. " Insiders and Outsiders in Union," Journal of Economic Surveys, Wiley Blackwell, vol. 9(3), pages 255-84.
- Michele Belot & Jan Boone & Jan van Ours, 2004.
"Welfare Improving Employment Protection,"
DEGIT Conference Papers
c009_004, DEGIT, Dynamics, Economic Growth, and International Trade.
- Pissarides, Christopher A., 2001. "Employment protection," Labour Economics, Elsevier, vol. 8(2), pages 131-159, May.
- W. Bentley MACLEOD & James M. MALCOMSON, 1995.
"Turnover Costs, Efficiency Wages and Cycles,"
Annales d'Economie et de Statistique,
ENSAE, issue 37-38, pages 55-74.
- MacLeod, W.B. & Malcomson, J.M., 1994. "Turnover costs, efficiency wages and cycles," Discussion Paper Series In Economics And Econometrics 9410, Economics Division, School of Social Sciences, University of Southampton.
- Chatrerji, Monojit & Sparks, Roger, 1991. "Real wages, productivity, and the cycle: An efficiency wage model," Journal of Macroeconomics, Elsevier, vol. 13(3), pages 495-510.
- Assar Lindbeck & Dennis J. Snower, 2001. "Insiders versus Outsiders," Journal of Economic Perspectives, American Economic Association, vol. 15(1), pages 165-188, Winter.
- Chang, Juin-Jen & Lin, Chung-Cheng & Lai, Ching-Chong, 1999. "The Unemployment and Wage Effects of Shifting to an Indirect Tax in an Efficiency Wage Model," The Economic Record, The Economic Society of Australia, vol. 75(229), pages 156-66, June.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
- Goerke, Laszlo, 2002. "On dismissal pay," Labour Economics, Elsevier, vol. 9(4), pages 497-512, September.
- Garibaldi, Pietro & Violante, Giovanni L, 2004.
"The Employment Effects of Severance Payments with Wage Rigidities,"
CEPR Discussion Papers
4608, C.E.P.R. Discussion Papers.
- Pietro Garibaldi & Giovanni L. Violante, 2005. "The Employment Effects of Severance Payments with Wage Rigidities," Economic Journal, Royal Economic Society, vol. 115(506), pages 799-832, October.
- Fella, Giulio, 2000. "Efficiency wage and efficient redundancy pay," European Economic Review, Elsevier, vol. 44(8), pages 1473-1490, August.
- Bertola, Giuseppe, 1999. "Microeconomic perspectives on aggregate labor markets," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 45, pages 2985-3028 Elsevier.
- Pisauro, Giuseppe, 1991. "The effect of taxes on labour in efficiency wage models," Journal of Public Economics, Elsevier, vol. 46(3), pages 329-345, December.
- Carter, Thomas J., 1998. "Minimum wage laws: what does an employment increase imply about output and welfare?," Journal of Economic Behavior & Organization, Elsevier, vol. 36(4), pages 473-485, September.
- E. Galdon-Sanchez, Jose & Guell, Maia, 2003.
"Dismissal conflicts and unemployment,"
European Economic Review,
Elsevier, vol. 47(2), pages 323-335, April.
- José Enrique Galdón Sánchez & Maia Güell, 2001. "Dismissal conflicts and unemployment," Documentos de Trabajo - Lan Gaiak Departamento de EconomÃa - Universidad PÃºblica de Navarra 0105, Departamento de Economía - Universidad Pública de Navarra.
- Burda, Michael C, 1992. " A Note on Firing Costs and Severance Benefits in Equilibrium Unemployment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(3), pages 479-89.
- Parsons, Donald O., 2011. "Mandated Severance Pay and Firing Cost Distortions: A Critical Review of the Evidence," IZA Discussion Papers 5776, Institute for the Study of Labor (IZA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.