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Employment and Wage Insurance within Firms: Worldwide Evidence

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

Abstract

We investigate the determinants of firms? implicit insurance to employees, using a difference-in-difference 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

  • Pagano, Marco & Ellul, Andrew & Schivardi, Fabiano, 2015. "Employment and Wage Insurance within Firms: Worldwide Evidence," CEPR Discussion Papers 10711, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:10711
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    More about this item

    Keywords

    Risk-sharing; Insurance; Social security; Unemployment; Wages; Family firms;
    All these keywords.

    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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