Job mobility and creative destruction: flexicurity in the land of Schumpeter
This paper evaluates the 2003 Austrian severance-pay reform, often advocated as a role model for structural reforms in countries plagued by inflexible labor markets and high unemployment. The reform replaced a system with tenure-based severance payments after a layoff (but not after a quit) by payments into pension accounts that accrue to workers after a layoff as well as after a quit. We identify the reform effects using a regression discontinuity (RD) design and find a substantial increase in job mobility in response to the reform. A search-and-matching model with on-the- job search and tenure-dependent severance payments is structurally estimated using the RD-induced empirical moments. Counterfactual policy experiments suggest that flexicurity reforms spur job creation and can substantially reduce unemployment in countries where severance payments are initially high.
|Date of creation:||Jun 2017|
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Guido Imbens & Karthik Kalyanaraman, 2012.
"Optimal Bandwidth Choice for the Regression Discontinuity Estimator,"
Review of Economic Studies,
Oxford University Press, vol. 79(3), pages 933-959.
- Guido Imbens & Karthik Kalyanaraman, 2009. "Optimal Bandwidth Choice for the Regression Discontinuity Estimator," NBER Working Papers 14726, National Bureau of Economic Research, Inc.
- Imbens, Guido W. & Kalyanaraman, Karthik, 2009. "Optimal Bandwidth Choice for the Regression Discontinuity Estimator," IZA Discussion Papers 3995, Institute for the Study of Labor (IZA).
- Guido Imbens & Karthik Kalyanaraman, 2010. "Optimal bandwidth choice for the regression discontinuity estimator," CeMMAP working papers CWP05/10, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
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