%0 Report
        %A Goerke, Laszlo
        %T Earnings-Related Severance Pay
        %D 2006
        %8 2006 Jul
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 2232
        %U https://www.iza.org/publications/dp2232
        %X In an efficiency wage economy, lump-sum severance pay from which shirkers can be excluded raises employment. However, severance payments are usually related to wages. It is shown that earnings-related, mandated severance pay will have ambiguous employment effects if effort can be varied continuously. A substitution of the earnings-related for the lump-sum component reduces employment. Thus, the prevalent form of severance payments in OECD countries might have less advantageous employment effects than previously conjectured.
        %K earnings relationship
%K efficiency wages
%K employment
%K severance pay