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...

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Detalles Bibliográficos
Autor principal: Alvarez, F.
Otros Autores: Veracierto, M.
Formato: Capítulo de libro
Lenguaje:Inglés
Publicado: 2001
Acceso en línea:Registro en Scopus
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245 1 0 |a Severance payments in an economy with frictions 
260 |c 2001 
270 1 0 |m Alvarez, F.; Department of Economics, University of Chicago, Chicago, IL 60637, United States 
506 |2 openaire  |e Política editorial 
504 |a Alvarez, F., Veracierto, M., (1998) Search, Self-insurance and Job-security Provisions, , Federal Reserve Bank of Chicago WP-98-2 
504 |a Anderson, P., Meyer, B., (1993) The Effects of Unemployment Insurance Taxes and Benefits on Layoffs Using Firm and Individual Data, , Northwestern University 
504 |a Blank, R.M., Card, D., (1988) Recent Trends in Insured and Uninsured Unemployment: Is There An Explanation?, , Princeton University 
504 |a Bentolila, S., Bertola, G., Firing cost and labour demand: How bad is eurosclerosis? (1990) Review of Economic Studies, 57, pp. 381-402 
504 |a Davis, S., Haltiwanger, J., Gross job creation and destruction: microeconomic evidence and macroeconomic implications (1990) NBER Macroeconomics Annual, 5, pp. 123-168 
504 |a Hopenhayn, H., Rogerson, R., Job turnover and policy evaluation: A general equilibrium analysis (1993) Journal of Political Economy, 101, pp. 915-938 
504 |a Lazear, E., Job security provisions and employment (1990) Quarterly Journal of Economics, 105, pp. 699-726 
504 |a Meyer, B., Unemployment insurance and unemployment spells (1990) Econometrica, 58, pp. 757-782 
504 |a Millard, S., Mortensen, D., (1994) The Unemployment and Welfare Effects of Labour Market Policy: A Comparison of the U.S. and the U.K. Northwestern University 
504 |a Veracierto, M., Employment flows, capital mobility and policy analysis (2001) International Economic Review, , forthcoming 
520 3 |a 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.  |l eng 
593 |a Department of Economics, University of Chicago, Chicago, IL 60637, United States 
593 |a Universidad Torcuato di Tella, (1428), Buenos Aires, Argentina 
593 |a National Bureau of Economic Research, Cambridge, MA 02138, United States 
593 |a Research Department, Fed. Reserve Bank Chicago, S. L., Chicago, IL 60604, United States 
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690 1 0 |a J64 
690 1 0 |a J65 
690 1 0 |a J66 
690 1 0 |a SEARCH 
690 1 0 |a SEVERANCE PAYMENTS 
690 1 0 |a UNEMPLOYMENT INSURANCE 
700 1 |a Veracierto, M. 
773 0 |d 2001  |g v. 47  |h pp. 477-498  |k n. 3  |p J. Monet. Econ.  |x 03043932  |t Journal of Monetary Economics 
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