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The Employment Effects of Severance Payments with Wage Rigidities

Bibliographic Data

ID9716079
AuthorsPietro Garibaldi (0000-0002-4211-7915, Bocconi University and CEPR), Giovanni L Violante (New York University and CEPR)
Year2005
Volume115
Issue506
Pages799-832
Publication date2005-10-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2005.01020.x
OpenAlexW2046402534
LanguageEN
Citations received21
References cited27

Firing costs have two separate dimensions: a transfer from the firm to the laid-off worker and a tax paid outside the firm-worker pair. To avoid the 'bonding critique' most of the existing literature implicitly assumes that, in the presence of wage rigidity, transfers have the same real effects as taxes. This paper shows that this presumption is in general misplaced, especially so when the degree of wage rigidity is endogenous. The predictions of our theory find empirical support in a panel data-set of OECD countries. Copyright 2005 Royal Economic Society

Economic history · Economics · Labour economics · Payment · Political science · Severance · Wage · Economic Policies and Impacts · Finance · Firm Innovation and Growth · Labor market dynamics and wage inequality

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Unique citing works21
Citations per year1,11
Citation span2007 - 2025 (19)
Citation velocityrecent
Highly citedNo
Citation typesNeutral: 19
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