Empirical Analysis of the Severance Pay Non-Performance in Slovenia
Combining information from the Firm Survey of Labor Costs with the information about claims filed with the Guarantee Fund by workers whose employers defaulted on their severance pay obligations, the paper analyzes the so-called non-performance problem of severance pay – the fact that coverage, and thus legal entitlement, does not guarantee the actual receipt of the benefit – as experienced in Slovenia in 2000. The findings are threefold: (i) one-third of total obligations incurred by firms failed to be honored and only a small portion of defaulted severance pay claims was reimbursed by the Guarantee Fund; (ii) while both men and women seem to be equally affected, workers older than 40 were disproportionally represented among those whose severance pay claims failed to be honored; and, (iii) among firms that incurred severance pay liabilities, larger and more productive firms were more likely to observe their fiduciary obligations and pay them out. These findings corroborate the weaknesses of severance pay as an income protection program, pointing to the large scale of the non-performance problem and the inequities created by it.
Volume (Year): 7 (2009)
Issue (Month): 4 ()
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References listed on IDEAS
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- Peter F. Orazem & Milan Vodopivec, 2009.
"Do Market Pressures Induce Economic Efficiency? The Case of Slovenian Manufacturing, 1994–2001,"
Southern Economic Journal,
Southern Economic Association, vol. 76(2), pages 553-576, October.
- Orazem, Peter F. & Vodopivec, Milan, 2003. "Do Market Pressures Induce Economic Efficiency: The Case of Slovenian Manufacturing, 1994-2001," IZA Discussion Papers 901, Institute for the Study of Labor (IZA).
- Orazem, Peter & Vodopivec, Milan, 2003. "Do Market Pressures Induce Economic Efficiency?: The Case of Slovenian Manufacturing, 1994-2001," Staff General Research Papers Archive 10727, Iowa State University, Department of Economics.
- Orazem, Peter F. & Vodopivec, Milan, 2004. "Do market pressures induce economic efficiency ? The case of Slovenian manufacturing, 1994-2001," Policy Research Working Paper Series 3189, The World Bank.
- Holzmann, Robert & Pouget, Yann & Vodopivec, Milan & Weber, Michael, 2011. "Severance pay programs around the world : history, rationale, status, and reforms," Social Protection and Labor Policy and Technical Notes 62726, The World Bank.
- Holzmann, Robert & Pouget, Yann & Vodopivec, Milan & Weber, Michael, 2011. "Severance Pay Programs around the World: History, Rationale, Status, and Reforms," IZA Discussion Papers 5731, Institute for the Study of Labor (IZA).
- Jan C. van Ours & Milan Vodopivec, 2006. "How Shortening the Potential Duration of Unemployment Benefits Affects the Duration of Unemployment: Evidence from a Natural Experiment," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 351-378, April.
- John T. Addison & Paulino Teixeira, 2003. "The Economics of Employment Protection," Journal of Labor Research, Transaction Publishers, vol. 24(1), pages 85-129, January.
- Addison, John T. & Teixeira, Paulino, 2001. "The Economics of Employment Protection," IZA Discussion Papers 381, Institute for the Study of Labor (IZA).
- Reinhard Koman & Ulrich Schuh & Andrea Weber, 2005. "The Austrian Severance Pay Reform: Toward a Funded Pension Pillar," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 32(3), pages 255-274, 09. Full references (including those not matched with items on IDEAS)
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