Layoff Costs and Efficiency with Asymmetric Information
AbstractWage determination under asymmetric information generates inefficiencies due to excess turnover. Severance pay and layoff taxes can improve efficiency. We show that inefficient separations can even be fully removed with fixed separation taxes in the case where the relevant private information is exponentially distributed.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4524.
Length: 12 pages
Date of creation: Oct 2009
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Other versions of this item:
- Alain Delacroix & Etienne Wasmer, 2009. "Layoff Costs and Efficiency with Asymmetric Information," Sciences Po publications info:hdl:2441/5l6uh8ogmqi, Sciences Po.
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-14 (All new papers)
- NEP-BEC-2009-11-14 (Business Economics)
- NEP-CTA-2009-11-14 (Contract Theory & Applications)
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