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Non-performance of the severance pay program in Slovenia

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  • Vodopivec, Milan
  • Madzar, Lilijana
  • Dolenc, Primoz

Abstract

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 disproportion ally 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.

Suggested Citation

  • Vodopivec, Milan & Madzar, Lilijana & Dolenc, Primoz, 2009. "Non-performance of the severance pay program in Slovenia," The Social Policy and Labor Discussion Paper Series 47070, The World Bank.
    • Handle: RePEc:wbk:hdnspu:47070
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    2. Kuddo, Arvo, 2009. "Structural educational reform : evidence from a teacher's displacement program in Armenia," The Social Policy and Labor Discussion Paper Series 47164, The World Bank.
    3. Milan Vodopivec & Lilijana Madjar & Primoz Dolenc, 2009. "Non-performance of the Severance Pay Program in Slovenia," Financial Theory and Practice, Institute of Public Finance, vol. 33(1), pages 89-102.
    4. Woolford, Geoff, 2009. "Social protection for migrants from the Pacific Islands in Australia and New Zealand," The Social Policy and Labor Discussion Paper Series 49174, The World Bank.
    5. Milan Vodopivec, 2013. "Introducing unemployment insurance to developing countries," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.
    6. Chae, ChangKyun & Chung, Jaeho, 2009. "Pre-employment vocational education and training in Korea," The Social Policy and Labor Discussion Paper Series 52186, The World Bank.
    7. Makhema, Mpho, 2009. "Social protection for refugees and asylum seekers in the Southern Africa Development Community (SADC)," The Social Policy and Labor Discussion Paper Series 49168, The World Bank.
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    10. Holzmann, Robert, 2010. "Bringing Financial Literacy and Education to Low and Middle Income Countries: The Need to Review, Adjust, and Extend Current Wisdom," IZA Discussion Papers 5114, IZA Network @ LISER.
    11. James, Estelle, 2009. "Rethinking survivor benefits," The Social Policy and Labor Discussion Paper Series 52919, The World Bank.
    12. Koettl, Johannes, 2009. "Human trafficking, modern day slavery, and economic exploitation," The Social Policy and Labor Discussion Paper Series 49802, The World Bank.
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    14. Lord, Janet & Posarac, Aleksandra & Nicoli, Marco & Peffley, Karen & Mcclain-Nhlapo, Charlotte & Keogh, Mary, 2010. "Disability and international cooperation and development : a review of policies and practices," The Social Policy and Labor Discussion Paper Series 56092, The World Bank.
    15. Ferrer, Ana M. & Riddell, W. Craig, 2009. "Unemployment insurance savings accounts in Latin America : overview and assessment," The Social Policy and Labor Discussion Paper Series 49173, The World Bank.

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