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Non-performance of the severance pay program in Slovenia

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

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.

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Paper provided by The World Bank in its series Social Protection Discussion Papers with number 47070.

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Date of creation: 01 Jan 2009
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Handle: RePEc:wbk:hdnspu:47070
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  1. Braithwaite , Jeanine & Mont , Daniel, 2008. "Disability and poverty : a survey of World Bank poverty assessments and implications," Social Protection Discussion Papers 42754, The World Bank.
  2. Haja, Nirina Andrianjaka & Milazzo, Annamaria, 2008. "Highly labor-intensive public works in Madagascar : issues and policy options," Social Protection Discussion Papers 47357, The World Bank.
  3. Macours, Karen & Vakis, Renos, 2010. "Seasonal Migration and Early Childhood Development," World Development, Elsevier, vol. 38(6), pages 857-869, June.
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  10. Vodopivec, Milan & Madzar, Lilijana & Dolenc, Primoz, 2009. "Non-performance of the severance pay program in Slovenia," Social Protection Discussion Papers 47070, The World Bank.
  11. F. Angel-Urdinola, Diego, 2008. "Can the Introduction of a Minimum Wage in FYR Macedonia Decrease the Gender Wage Gap?," Policy Research Working Paper Series 4795, The World Bank.
  12. Vodopivec, Milan & Arunatilake, Nisha, 2008. "Population aging and the labor market : the case of Sri Lanka," Social Protection Discussion Papers 44927, The World Bank.
  13. Almeida, Rita & Aterido, Reyes, 2008. "The incentives to invest in job training : do strict labor codes influence this decision?," Social Protection Discussion Papers 46189, The World Bank.
  14. Barrett , Christopher B & Carter , Michael R & Ikegami , Munenobu, 2008. "Poverty traps and social protection," Social Protection Discussion Papers 42752, The World Bank.
  15. Milazzo, Annamaria & Grosh, Margaret, 2008. "Social safety nets in World Bank lending and analytical work : FY2002 - 2007," Social Protection Discussion Papers 44730, The World Bank.
  16. Addison, John T. & Teixeira, Paulino, 2001. "The Economics of Employment Protection," IZA Discussion Papers 381, Institute for the Study of Labor (IZA).
  17. 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.
  18. Milan Vodopivec, 2004. "Income Support for the Unemployed : Issues and Options," World Bank Publications, The World Bank, number 14922.
  19. Bhattamishra, Ruchira & Barrett, Christopher B., 2010. "Community-Based Risk Management Arrangements: A Review," World Development, Elsevier, vol. 38(7), pages 923-932, July.
  20. Braithwaite, Jeanine & Carroll, Richard & Mont, Daniel & Peffley, Karen, 2008. "Disability and development in the World Bank : FY2000-2007," Social Protection Discussion Papers 45178, The World Bank.
  21. Peracchi, Franco & Perotti, Valeria & Scarpetta, Stefano, 2007. "Informality and social protection : preliminary results from pilot surveys in Bulgaria and Colombia," Social Protection Discussion Papers 41541, The World Bank.
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