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http://hdl.handle.net/10419/34136
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| Title: | | Earnings-related severance pay  |
| Authors: | | Goerke, Laszlo |
| Issue Date: | | 2006 |
| Series/Report no.: | | IZA Discussion Papers 2232 |
| Abstract: | | In an efficiency wage economy, lump-sum severance pay from which shirkers can be excluded raises employment. However, severance payments are usually related to wages. It is shown that earnings-related, mandated severance pay will have ambiguous employment effects if effort can be varied continuously. A substitution of the earnings-related for the lump-sum component reduces employment. Thus, the prevalent form of severance payments in OECD countries might have less advantageous employment effects than previously conjectured. |
| Subjects: | | earnings relationship efficiency wages employment severance pay |
| JEL: | | J32 J41 J65 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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