Job Mobility and Creative Destruction: Flexicurity in the Land of Schumpeter

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper evaluates the 2003 Austrian severance-pay reform, often advocated as a role model for structural reforms in countries plagued by inflexible labor markets and high unemployment. The reform replaced a system with tenure-based severance payments after a layoff (but not after a quit) by payments into pension accounts that accrue to workers after a layoff as well as after a quit. We identify the reform effects using a regression discontinuity (RD) design and find a substantial increase in job mobility in response to the reform. A search-and-matching model with on-thejob search and tenure-dependent severance payments is structurally estimated using the RD-induced empirical moments. Counterfactual policy experiments suggest that flexicurity reforms spur job creation and can substantially reduce unemployment in countries where severance payments are initially high. * We would like to thank Terms of use: Documents in

Flexicurity models and productivity interference in C.E.E. countries: a new approach based on cluster and spatial analysis

“…Some of these studies concurred that selected flexicurity measures increased labour and total factor productivity (Laporšek & Dolenc, 2011;Dolenc & Laporšek, 2013;Muffels & Wilthagen, 2013;Rotar, 2017), while others challenge the flexicurity coordinates as being the main contributors to labour market performance (Andersen & Svarer, 2007). Yet others concluded that flexicurity reforms spur job creation and can substantially reduce unemployment in countries where severance payments are initially high (Kettemann et al, 2017). Differently from others, Seifert and Tangian (2007) bring some empirical evidence for Europe on a possible reconciliation between social security with flexibility and show a positive dependence between aggregate flexibility and aggregate precariousness of work all over Europe.…”

Republic of Korea: Selected Issues

“…For example, Austria introduced a reform of severance pay in 2003, which increased flexibility while ensuring income security. Kettemann et al (2017) find that the reform resulted in a substantial increase in job mobility. Portugal introduced an even broader set of reforms between 2011 and 2015 that reduced severance pay and eased the definition of fair dismissal, while widening the safety net and strengthening its activation framework.…”

Introducing individual savings accounts for severance pay in Spain

“…Reinstatement cannot be imposed on the employer, except in the case of prohibited grounds, such as discrimination. A reform introduced in 2012 has clarified the circumstances under which a layoff can be justified for economic reasons, but judges continue to retain a certain degree of discretion in assessing different cases (Jimeno, Martínez-Matute and Mora-Sanguinetti, 2020 [5]). Insufficient performance, without unsuitability, is not a fair reason for dismissal in Spain.…”