Severance payments in an economy with frictions

We construct a general equilibrium model to evaluate the quantitative effects of severance payments in the presence of contractual and reallocational frictions. Key elements of the model are establishment level dynamics, imperfect insurance markets, and variable search decisions. In contrast to prev...

Descripción completa

Guardado en:

Detalles Bibliográficos
Autores principales:	Alvarez, F., Veracierto, M.
Formato:	JOUR
Materias:	E24 J64 J65 J66 Search Severance payments Unemployment insurance
Acceso en línea:	http://hdl.handle.net/20.500.12110/paper_03043932_v47_n3_p477_Alvarez
Aporte de:	Biblioteca Digital - Facultad de Ciencias Exactas y Naturales (UBA) de Universidad de Buenos Aires

id	todo:paper_03043932_v47_n3_p477_Alvarez
record_format	dspace
spelling	todo:paper_03043932_v47_n3_p477_Alvarez2023-10-03T15:20:15Z Severance payments in an economy with frictions Alvarez, F. Veracierto, M. E24 J64 J65 J66 Search Severance payments Unemployment insurance We construct a general equilibrium model to evaluate the quantitative effects of severance payments in the presence of contractual and reallocational frictions. Key elements of the model are establishment level dynamics, imperfect insurance markets, and variable search decisions. In contrast to previous studies that analyzed severance payments in frictionless environments, we find that severance payments can have large positive effects on employment and welfare. This result is a consequence of search being costly and of wage contracts being rigid. Moreover, we find that the firing penalty role of severance payments is much more important than their insurance role. © 2001 Elsevier Science B.V. JOUR info:eu-repo/semantics/openAccess http://creativecommons.org/licenses/by/2.5/ar http://hdl.handle.net/20.500.12110/paper_03043932_v47_n3_p477_Alvarez
institution	Universidad de Buenos Aires
institution_str	I-28
repository_str	R-134
collection	Biblioteca Digital - Facultad de Ciencias Exactas y Naturales (UBA)
topic	E24 J64 J65 J66 Search Severance payments Unemployment insurance
spellingShingle	E24 J64 J65 J66 Search Severance payments Unemployment insurance Alvarez, F. Veracierto, M. Severance payments in an economy with frictions
topic_facet	E24 J64 J65 J66 Search Severance payments Unemployment insurance
description	We construct a general equilibrium model to evaluate the quantitative effects of severance payments in the presence of contractual and reallocational frictions. Key elements of the model are establishment level dynamics, imperfect insurance markets, and variable search decisions. In contrast to previous studies that analyzed severance payments in frictionless environments, we find that severance payments can have large positive effects on employment and welfare. This result is a consequence of search being costly and of wage contracts being rigid. Moreover, we find that the firing penalty role of severance payments is much more important than their insurance role. © 2001 Elsevier Science B.V.
format	JOUR
author	Alvarez, F. Veracierto, M.
author_facet	Alvarez, F. Veracierto, M.
author_sort	Alvarez, F.
title	Severance payments in an economy with frictions
title_short	Severance payments in an economy with frictions
title_full	Severance payments in an economy with frictions
title_fullStr	Severance payments in an economy with frictions
title_full_unstemmed	Severance payments in an economy with frictions
title_sort	severance payments in an economy with frictions
url	http://hdl.handle.net/20.500.12110/paper_03043932_v47_n3_p477_Alvarez
work_keys_str_mv	AT alvarezf severancepaymentsinaneconomywithfrictions AT veraciertom severancepaymentsinaneconomywithfrictions
_version_	1807320130347073536

Severance payments in an economy with frictions

Ejemplares similares