Layoff Costs and Efficiency with Asymmetric Information

Wage determination under asymmetric information generates ine¢ ciencies due to excess turnover. Severance pay and layo¤ taxes can improve e¢ ciency. We show that inefficient separations can even be fully removed with xed separation taxes in the case where therelevant private information is exponentially distributed.

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Year of publication:	2009-09-04
Authors:	Delacroix, Alain ; Wasmer, Etienne
Institutions:	Sciences économiques, Sciences Po

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Extent:	application/pdf
Series:	Sciences Po publications.
Type of publication:	Book / Working Paper
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011003712