We analyze the effects of government-mandated severance payments in a rich life-cycle model with search-matching frictions in the labor market, risk-averse agents and imperfect insurance against idiosyncratic shocks. Our model emphasizes a tension between worker-firm wage bargains and...

Job-to-job turnover provides a way for employers to escape statutory firing costs, as unprofitable workers may willfully quit their job on receiving an outside offer, thus sparing their incumbent employer the firing costs. Furthermore, employers can induce their unprofitable workers to accept...

An increase in legally binding severance payments creates both an incentive and a disincentive for workers to invest in firmspecific human capital. Which effect prevails on balance depends on the productivity of the worker s human capital investment. For strong positive reactions, increases in...

Does a payment paid to a contractor as an incentive to complete the contract early constitute a redundancy payment under section 68 of the Income Tax Act 1976? Thorburn v. Commissioner of Inland Revenue (1983) 6 NZTC 61,618 (HC) held that it did constitute a redundancy payment, since one of the...