In a perfect labor market severance payments can have no real effects as they can beundone by a properly designed labor contract (Lazear 1990). We give empirical content tothis proposition by estimating the effects of EPL on entry wages and on the tenure-wageprofile in a quasi-experimental...

Many contributions suggest that earnings instability has increased during the 1980s and1990s. This paper develops and estimates an on-the-job search model of the labor market tostudy the contribution of wage inequality and job mobility in explaining earnings instability. Tostudy the evolution...