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http://hdl.handle.net/10419/21162
  
Title:Downsizing PDF Logo
Authors:Pfann, Gerard A.
Issue Date:2001
Series/Report no.:IZA Discussion paper series 307
Abstract:Optimal layoff rules in closed form are derived for all workers in a firm that downsizes under uncertainty and faces heterogeneous firing costs. The theoretical model predicts that the firm displaces workers with low firing costs, low expected future productivity growth, and low layoff option values. The empirical analysis based on personnel records from a Dutch aircraft building company that went bankrupt in 1996 shows that workers with high uncertainty associated with higher than average expected productivity growth are most likely to be retained.
Subjects:Layoff rules
firing costs
uncertainty
heterogeneity
JEL:J33
J63
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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