Layoff Costs and Efficiency with Asymmetric Information
AbstractWage determination under asymmetric information generates ine¢ ciencies due to excess turnover. Severance pay and layo¤ taxes can improve e¢ ciency. We show that inefficient separations can even be fully removed with xed separation taxes in the case where therelevant private information is exponentially distributed.
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Date of creation: 04 Sep 2009
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- Delacroix, Alain & Wasmer, Etienne, 2009. "Layoff Costs and Efficiency with Asymmetric Information," IZA Discussion Papers 4524, Institute for the Study of Labor (IZA).
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General
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