Jappelli, Tullio; Padula, Mario - Centro Studi di Economia e Finanza (CSEF) - 2014
In 2000 Italy replaced its traditional system of severance pay for public employees with a new system. Under the old … regime, severance pay was proportional to the final salary before retirement; under the new regime it is proportional to … theoretical simulations, we find that each euro reduction in severance pay reduces the average propensity to consume by 3 cents …