Fella, Giulio - Volkswirtschaftliche Fakultät, … - 2012
This paper studies the effect mandated severance pay in a matching model featuring wage rigidity for ongoing, but not … new, matches and Pareto efficient spot renegotiation of mandated severance pay. Severance pay matters only if real wage … rigidities imply inefficient separation under employment at will. In such a case, large enough severance payments reduce job …