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Double-Sided Moral Hazard in Job Displacement Insurance Contracts

Parsons, Donald O. - Institute for the Study of Labor (IZA) - 2011

another of the separation programs will work. Offer acceptance requires restrictions on leisure (workfare). Unfortunately, if …

Persistent link: https://www.econbiz.de/10009323545

Severance Pay Mandates: Firing Costs, Hiring Costs, and Firm Avoidance Behaviors

Parsons, Donald O. - Institute for the Study of Labor (IZA) - 2011

The potentially adverse labor market effects of severance pay mandates are a continuing source of policy concern. In a seminal study, Lazear (1990) found that contract avoidance of severance pay firing costs was theoretically simple – a bonding scheme would do – but that empirically the...

Persistent link: https://www.econbiz.de/10009225769

Understanding severance pay

Parsons, Donald O. - In: Cuadernos de Economía - Spanish Journal of Economics … 36 (2013) 102, pp. 155-165

Severance pay, a fixed-sum payment to workers at job separation, has been the focus of intense policy concern for the last several decades, but much of this concern is unearned. The design of the ideal separation package is outlined and severance pay emerges as a natural component of job...

Persistent link: https://www.econbiz.de/10010801170

Job Displacement Insurance: An Overview

Parsons, Donald O. - Institute for the Study of Labor (IZA) - 2014

Earnings losses from permanent job separations are a serious threat to the financial security of long-tenured workers. Job displacement insurance is presumably designed to offset these losses, but evidence suggests that consumption smoothing among the long-tenured displaced is seriously...

Persistent link: https://www.econbiz.de/10010959565

Understanding Severance Pay

Parsons, Donald O. - Institute for the Study of Labor (IZA) - 2013

Persistent link: https://www.econbiz.de/10010884124

Insuring displaced workers: human capital losses and severance pay design

Feng, Shuaizhang; Parsons, Donald O. - 2006

Displaced workers, especially long tenured workers, face large human capital losses. Private firms frequently offer insurance against this threat in the form of severance pay - scheduled benefits linked in expectation to the worker's human capital loss. We explore this linkage, first reviewing...

Persistent link: https://www.econbiz.de/10010267723

The firing cost implications of alternative severance pay designs

Parsons, Donald O. - 2010

Economists have concerns about the firing cost implications of mandated severance plans. Analysis reveals that predicted severance plan consequences depend critically on the precise structure of the plan. Whether governments mandate (i) severance insurance plans or (ii) severance savings plans...

Persistent link: https://www.econbiz.de/10010269826

The Simple Analytics of Job Displacement Insurance

Parsons, Donald O. - 2016

Job displacement in the U.S. is a serious threat to the earnings of long-tenured workers, through both (i) unemployment spells and (ii) reduced reemployment wages. Although full insurance requires both unemployment benefits and wage insurance, supply difficulties limit actual-loss insurance, and...

Persistent link: https://www.econbiz.de/10011479341

Moral-Hazard-Free First-Best Unemployment Insurance

Parsons, Donald O. - 2016

state utility function--utility with a single argument, consumption plus monetized leisure. The monetized leisure model is … unattractive if leisure is a choice variable, however, and a review of the optimal UI literature reveals a surprising variety of … that leisure and consumption be substitutes (the cross-derivative of consumption and leisure be negative) and (ii) the …

Persistent link: https://www.econbiz.de/10011479342

Job Displacement Insurance: A Policy Typology

Parsons, Donald O. - 2016

Efforts to insure long-tenured displacement workers against earnings losses from unemployment spells and lower wages on subsequent jobs have led to an array of government and employer programs. A policy typology is proposed to impose order on these programmatic efforts. The basic typology...

Persistent link: https://www.econbiz.de/10011479383