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Employment and wage insurance within firms: Worldwide evidence

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  • Ellul, Andrew
  • Pagano, Marco
  • Schivardi, Fabiano

Abstract

We investigate the determinants of firms' implicit insurance to employees, using a difference-indifference approach: we rely on differences between family and non-family firms to identify the supply of insurance, and exploit variation in unemployment insurance across and within countries to gauge workers' demand for insurance. Using a firm-level panel from 41 countries, we find that family firms feature more stable employment, greater wage flexibility and lower labor cost than non-family ones. Employment stability in family firms is greater, and the wage discount larger, in countries with more generous public unemployment insurance: private and public provision of employment insurance are substitutes.

Suggested Citation

  • Ellul, Andrew & Pagano, Marco & Schivardi, Fabiano, 2015. "Employment and wage insurance within firms: Worldwide evidence," CFS Working Paper Series 517, Center for Financial Studies (CFS).
  • Handle: RePEc:zbw:cfswop:517
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    Citations

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    Cited by:

    1. Chinhui Juhn & Kristin McCue & Holly Monti & Brooks Pierce, 2018. "Firm Performance and the Volatility of Worker Earnings," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 99-131.
    2. Matthias Efing & Harald Hau & Patrick Kampkktter & Jean-Charles Rochet, 2018. "Bank Bonus Pay as a Risk Sharing Contract," Working Papers hal-01847442, HAL.
    3. Marco Pagano & Luca Picariello, 2017. "Talent Discovery, Layoff Risk and Unemployment Insurance," CSEF Working Papers 480, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 23 May 2018.
    4. Giacinta Cestone & Chiara Fumagalli & Francis Kramaz & Giovanni Pica, 2015. "Insurance Between Firms: The Role of Internal Labor Markets," CSEF Working Papers 386, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 15 Feb 2017.
    5. Andrew Ellul & Marco Pagano, 2017. "Corporate Leverage and Employees’ Rights in Bankruptcy," CSEF Working Papers 472, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 19 Mar 2019.
    6. Renata Lemos & Daniela Scur, 2018. "All in the Family? CEO Choice and Firm Organization," CEP Discussion Papers dp1528, Centre for Economic Performance, LSE.
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    8. repec:eee:corfin:v:46:y:2017:i:c:p:461-476 is not listed on IDEAS
    9. Efing, Matthias & Hau, Harald & Kampkötter, Patrick & Rochet, Jean-Charles, 2018. "Bank Bonus Pay as a Risk Sharing Contract," HEC Research Papers Series 1285, HEC Paris.
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    11. repec:eee:jfinec:v:125:y:2017:i:2:p:369-388 is not listed on IDEAS
    12. Heywood, John S. & O'Mahony, Mary & Siebert, W. Stanley & Rincon-Aznar, Ana, 2018. "The Impact of Employment Protection on the Industrial Wage Structure," IZA Discussion Papers 11788, Institute of Labor Economics (IZA).
    13. repec:eee:jfinec:v:127:y:2018:i:2:p:303-324 is not listed on IDEAS

    More about this item

    Keywords

    risk-sharing; insurance; social security; unemployment; wages; family firms;

    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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