In 1990, Colombia replaced its traditional system of severance payments with a new system of severance payments savings accounts (SPSAs). Although severance payments are often justified on the grounds that they provide insurance against earnings loss, they also increase costs for employers and...

In this article we model the determinants of severance pay for individual dismissals in Spain, following an idea proposed by Jimeno and Toharia (Economistas 55: 243-255, 1993). We point out the importance of severance pay settled before judgment, since the legal framework creates a bargaining...

The Canada Dry pensions system is in some countries one of the frequent routes to early retirement. It constitutes an informal substitute for early retirement programs. Accordingly, firms lay off aged workers they find costly for what they produce and, to get their support, supplement...

Many partnership contracts (and other joint-venture agreements) include so-called "Texas Shootout Clauses" to govern future breakups. In a Texas Shootout, one partner names a single buy-sell price and the other partner has the option to buy or sell at that price. While the prior literature has...

What effect does employment protection through severance payments have on the behaviour of employed workers? We analyse this issue within a stochastic two-period framework where workers decide on human capital investments and find two competing effects: severance payments imply higher job...