Inside severance pay

• 成果类型: Article
• 署名作者: Boeri, Tito; Garibaldi, Pietro; Moen, Espen R.
• 署名单位: Bocconi University; Collegio Carlo Alberto; University of Turin; BI Norwegian Business School
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2016.11.003
• 发表日期: 2017
• 页码: 211-225
• 关键词: Severance; Unfair dismissal; Graded security; Legal systems

摘要

All OECD countries have either legally mandated severance pay or compensations imposed by industry level bargaining in case of employer initiated job separations. The paper shows that mandatory severance is optimal in presence of wage deferrals induced by workers' moral hazard. We also establish a link between optimal severance and efficiency of the legal system and characterize the effects of shifting the burden of proof from the employer to the worker. Quantitatively, the welfare effects of suboptimal severance payments vary in general equilibrium between I and 3 %. The model accounts also for two neglected features of the legislation. The first is the discretion of judges in declaring the nature, economic vs. disciplinary, of the layoff. The second feature regards the relationship between severance and tenure. Our theory gives necessary conditions under which optimal severance is increasing with tenure, as generally observed. (C) 2016 Published by Elsevier B.V.