IDEAS home Printed from https://ideas.repec.org/a/iza/izawol/journly2015n174.html

Should severance pay be consistent for all workers?

Author

Listed:
  • J. Ignacio García Pérez

    (Universidad Pablo de Olavide and FEDEA, Spain)

Abstract

The trend towards labor market flexibility in Europe has typically involved introducing legislation that makes it easier for firms to issue temporary contracts with low firing costs, while not changing the level of protection that is in place for permanent jobs. This has created a strong “dualism” in some European labor markets, which might affect turnover, wage setting, and human capital accumulation. In view of this, some economists propose replacing the existing system of temporary and permanent contracts by a single open-ended contract for new hires, with severance pay smoothly increasing with tenure on the job.

Suggested Citation

  • J. Ignacio García Pérez, 2015. "Should severance pay be consistent for all workers?," IZA World of Labor, Institute of Labor Economics (IZA), pages 174-174, August.
    • Handle: RePEc:iza:izawol:journl:y:2015:n:174
    as

    Download full text from publisher

    File URL: http://wol.iza.org/articles/should-severance-pay-be-consistent-for-all-workers-1.pdf
    Download Restriction: no
    File URL: http://wol.iza.org/articles/should-severance-pay-be-consistent-for-all-workers
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Etienne Wasmer & Nicolas Lepage-Saucier & Juliette Schleich, 2013. "Moving towards a single labour contract: pros, cons and mixed feelings," Sciences Po Economics Publications (main) hal-03460980, HAL.
    2. Samuel Bentolila & Juan J. Dolado & Pierre Cahuc & Thomas Le Barbanchon, 2010. "Two-Tier Labor Markets in the Great Recession: France Vs. Spain," Working Papers wp2010_1009, CEMFI.
    3. Edward P. Lazear, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(3), pages 699-726.
    4. Marloes de Graaf-Zijl & Gerard van den Berg & Arjan Heyma, 2011. "Stepping stones for the unemployed: the effect of temporary jobs on the duration until (regular) work," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(1), pages 107-139, January.
    5. Cabrales, Antonio & Dolado, Juan J. & Mora, Ricardo, 2014. "Dual Labour Markets and (Lack of) On-the-Job Training: PIAAC Evidence from Spain and Other EU Countries," IZA Discussion Papers 8649, Institute of Labor Economics (IZA).
    6. Gilles Saint-Paul, 2002. "The Political Economy of Employment Protection," Journal of Political Economy, University of Chicago Press, vol. 110(3), pages 672-701, June.
    7. J Ignacio García-Pérez & Ioana Marinescu & Judit Vall Castello, 2019. "Can Fixed-term Contracts Put Low Skilled Youth on a Better Career Path? Evidence from Spain," The Economic Journal, Royal Economic Society, vol. 129(620), pages 1693-1730.
    8. Olivier J. Blanchard & Jean Tirole, 2008. "The Joint Design of Unemployment Insurance and Employment Protection: A First Pass," Journal of the European Economic Association, MIT Press, vol. 6(1), pages 45-77, March.
    9. Ignacio García Pérez, J. & Osuna, Victoria, 2014. "Dual labour markets and the tenure distribution: Reducing severance pay or introducing a single contract," Labour Economics, Elsevier, vol. 29(C), pages 1-13.
    10. repec:spo:wpmain:info:hdl:2441/6jnlp6n5qf91ooakkhrid6pv0a is not listed on IDEAS
    11. repec:spo:wpmain:info:hdl:2441/772g8m5php8ui8eticr0ak867g is not listed on IDEAS
    12. O Blanchard & A Landier, 2002. "The Perverse Effects of Partial Labour Market Reform: fixed--Term Contracts in France," Economic Journal, Royal Economic Society, vol. 112(480), pages 214-244, June.
    13. Nicolas Lepage-Saucier & Juliette Schleich & Etienne Wasmer, 2013. "Moving towards a single contract ? Pros, cons, and mixed feelings," Sciences Po Economics Publications (main) hal-03460872, HAL.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Samuel Bentolila & Juan Jose Dolado & Juan F. Jimeno, 2019. "Dual Labour Markets Revisited," CESifo Working Paper Series 7479, CESifo.
    2. Juan J. Dolado & Etienne Lalé & Nawid Siassi, 2021. "From dual to unified employment protection: Transition and steady state," Quantitative Economics, Econometric Society, vol. 12(2), pages 547-585, May.
    3. Siassi, Nawid & Dolado, Juan J. & Lalé, Etienne, 2015. "Moving Towards a Single Labor Contract: Transition vs. Steady State," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112858, Verein für Socialpolitik / German Economic Association.
    4. Berson, Clémence & Ferrari, Nicolas, 2015. "Financial incentives and labour market duality," Labour Economics, Elsevier, vol. 37(C), pages 77-92.
    5. Le Barbanchon, Thomas. & Malherbet, Franck., 2013. "An anatomy of the French labour market : country case studies on labour market segmentation," ILO Working Papers 994814973402676, International Labour Organization.
    6. repec:ilo:ilowps:481497 is not listed on IDEAS
    7. L'Haridon, Olivier & Malherbet, Franck, 2009. "Employment protection reform in search economies," European Economic Review, Elsevier, vol. 53(3), pages 255-273, April.
    8. Pierre Cahuc & Olivier Charlot & Franck Malherbet & Helène Benghalem & Emeline Limon, 2020. "Taxation of Temporary Jobs: Good Intentions with Bad Outcomes?," The Economic Journal, Royal Economic Society, vol. 130(626), pages 422-445.
    9. Makoto Masui, 2020. "The determinants of employers’ use of temporary contracts in the frictional labor market," Metroeconomica, Wiley Blackwell, vol. 71(4), pages 803-834, November.
    10. Decreuse, Bruno & van Ypersele, Tanguy, 2011. "Housing market regulation and the social demand for job protection," Journal of Public Economics, Elsevier, vol. 95(11), pages 1397-1409.
    11. Marta Silva & Luis Filipe Martins & Helena Lopes, 2015. "Asymmetric labour market reforms and wage growth with fixed-term contracts: does learning about match quality matter?," Working Papers Series 2 15-04, ISCTE-IUL, Business Research Unit (BRU-IUL).
    12. Victoria Osuna & Jose-Ignacio García-Pérez, 2012. "The effects of introducing a single open-ended contract in Spain," EcoMod2012 3825, EcoMod.
    13. Diego Daruich & Sabrina Di Addario & Raffaele Saggio, 2023. "The Effects of Partial Employment Protection Reforms: Evidence from Italy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(6), pages 2880-2942.
    14. Matteo Picchio & Mattia Filomena, 2021. "Are Temporary Jobs Stepping Stones Or Dead Ends? A Meta-Analytical Review Of The Literature," Working Papers 455, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    15. Daniela Sonedda, 2020. "Guess who's there: employment protection legislation and the degree of substitutability between labour contracts," IAAEU Discussion Papers 202007, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    16. Lawrence M. Kahn, 2016. "The Structure of the Permanent Job Wage Premium: Evidence from Europe," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(1), pages 149-178, January.
    17. Romain Duval & Prakash Loungani, 2021. "Designing Labor Market Institutions in Emerging Market and Developing Economies: A Review of Evidence and IMF Policy Advice," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 63(1), pages 31-83, March.
    18. Garcia-Louzao, Jose & Hospido, Laura & Ruggieri, Alessandro, 2023. "Dual returns to experience," Labour Economics, Elsevier, vol. 80(C).
    19. Samuel Bentolila & Juan Dolado & Juan Jimeno, 2012. "Reforming an insider-outsider labor market: the Spanish experience," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-29, December.
    20. J Ignacio García-Pérez & Ioana Marinescu & Judit Vall Castello, 2019. "Can Fixed-term Contracts Put Low Skilled Youth on a Better Career Path? Evidence from Spain," The Economic Journal, Royal Economic Society, vol. 129(620), pages 1693-1730.
    21. Gabriella BERLOFFA & Eleonora MATTEAZZI & Alina ŞANDOR & Paola VILLA, 2016. "Youth employment security and labour market institutions: A dynamic perspective," International Labour Review, International Labour Organization, vol. 155(4), pages 651-678, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izawol:journl:y:2015:n:174. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Institute of Labor Economics (IZA) (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.