Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/36048 
Year of Publication: 
2009
Series/Report no.: 
IZA Discussion Papers No. 4524
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Wage determination under asymmetric information generates inefficiencies due to excess turnover. Severance pay and layoff taxes can improve efficiency. We show that inefficient separations can even be fully removed with fixed separation taxes in the case where the relevant private information is exponentially distributed.
Subjects: 
Bargaining
asymmetric information
employment protection legislation
inefficient job separations
JEL: 
J41
J60
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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