Economists have concerns about the firing cost implications of mandated severance plans. Analysis reveals that …) severance insurance plans or (ii) severance savings plans is important; savings plans have no "firing cost" effects on employer … layoff decisions. The firing cost implications of insurance plan are sensitive to the types of job separations that qualify a …

apparent paradox – firing cost effects are modest even without firm avoidance activities. To explore why that should be so … and the economic environment. Although the analysis assumes a fixed benefit mandate, the cost measures are easily extended …