TY  - RPRT
        AU  - Goerke, Laszlo
        TI  - Earnings-Related Severance Pay
        PY  - 2006/Jul/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 2232
        UR  - https://www.iza.org/publications/dp2232
        AB  - 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.
        KW  - earnings relationship
KW  - efficiency wages
KW  - employment
KW  - severance pay
        ER  -