This contribution investigates severance payments for dismissed employees in Germany. Particularly, it responds to the following questions: Who receives severance payments? By which characteristics is the level of severance payments determined? Is overcompensation to be considered a relevant issue? Hereby, individual and collective dismissals are distinguished. This is the first study on this issue using individual representative data the German Socio-Economic Panel and multivariate methods. The results indicate that rather women, persons with many years of tenure and working in big firms receive severance payments. There is a huge variance in the size of the payments, which can only partly be explained by tenure, the wage and citizenship. About one quarter of dismissed employees is better off in their following careers independent of having received a severance payment.
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Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number
bgse4_2004.
Length: 37 Date of creation: Mar 2004 Date of revision: Handle: RePEc:bon:bonedp:bgse4_2004
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Find related papers by JEL classification: M51 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Firm Employment Decisions; Promotions M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Private Pensions J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
References listed on IDEAS 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.:
Gibbons, Robert & Katz, Lawrence F, 1991.
"Layoffs and Lemons,"
Journal of Labor Economics,
University of Chicago Press, vol. 9(4), pages 351-80, October.
[Downloadable!] (restricted)
Other versions:
Robert Gibbons & Lawrence Katz, 1989.
"Layoffs and Lemons,"
Working Papers
629, Princeton University, Department of Economics, Industrial Relations Section..
[Downloadable!]
Gibbons, R. & Katz, L.F., 1989.
"Layoffs And Lemons,"
Working papers
531, Massachusetts Institute of Technology (MIT), Department of Economics.
Robert Gibbons & Lawrence Katz, 1991.
"Layoffs and Lemons,"
NBER Working Papers
2968, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)