Severance Pay Programs around the World: History, Rationale, Status, and Reforms

Holzmann, Robert; Pouget, Yann; Vodopivec, Milan; Weber, Michael

doi:10.1596/9780821388495_ch02

Cited by 40 publications

(74 citation statements)

References 44 publications

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“…27 To save space, this 30 My information on severance arrangements is drawn from Holzmann et al (2011), from personal communications with national experts and from other country-speci c sources.…”

Section: Additional Sensitivity Checksmentioning

confidence: 99%

Living arrangements in Europe: whether and why paternal retirement matters

Stella

2016

Rev Econ Household

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This paper uses retrospective micro data from eleven European countries to investigate the role of paternal retirement in explaining children's decisions to leave the parental home. To assess causality, I use a bivariate discrete-time hazard model with shared frailty and exploit over time and cross-country variation in early retirement legislation. Overall, the results indicate a positive and signi cant in uence of paternal retirement on the probability of rst nest-leaving of children residing in Southern European countries, for both sons and daughters. By contrast, there is no evidence of signi cant e ects on children living in Northern and Central European countries. I then discuss and test empirically the potential mechanisms by which paternal retirement may a ect children's co-residence. I nd that the increase in children's nest-leaving around the time of paternal retirement does not appear to be justi ed by changes in parental resources. Rather, one must probably look for channels involving the supply of informal child care provided by grandparents or the negative externalities in preferences between retired fathers and their children.JEL Codes: J13, J26, J01

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Section: Additional Sensitivity Checksmentioning

confidence: 99%

Living arrangements in Europe: whether and why paternal retirement matters

Stella

2016

Rev Econ Household

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“…In the developed countries, it was introduced in most cases before old-age pension and unemployment insurance schemes (Holzmann et al, 2011). Severance pay (SP) may be i) compulsory, generally provided for in the Labor Code; ii) instituted through collective agreements at the national or sector level; or iii) voluntary, if firms decide to issue these payments.…”

Section: Severance Paymentioning

confidence: 99%

Empleos para crecer

Alaimo¹,

Bosch²,

Kaplan³

et al. 2015

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Attribution-NonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/ licenses/by-nc-nd/3.0/igo/legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license. Note that link provided above includes additional terms and conditions of the licenseThe opinions expressed in this publication are those of the authors and do not necessarily refl ect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. SECOND EDITIONThis edition includes some changes from the formatting of the fi rst edition. Changes in the calculation of non-wage costs have also been introduced, affecting Figures 2.6-2.10, 4.5, and 5.7. These changes are due to several adjustments that can be summarized as follows: 1. the inclusion of contributions to training institutions in Nicaragua and Paraguay; 2. changes in taxable income for the calculation of premiums (gross income in some cases and income net of the additional year-end bonus in others); 3. adjustments in the upper and lower thresholds for determining taxable income, which affect the calculation of the total contribution rate (as established by law, largely dependent on the minimum wage).Furthermore, specifi c adjustments were made for some countries. In Nicaragua, the advance notice penalty was eliminated, as it is not provided for in labor law, and in Jamaica, an adjustment was made in the working population obtained from the Labour Force Survey (which was employed to calculate the 2012 GDP per worker).In Figure 5.2, the indicator labeled "other special costs in the event of collective dismissals" for Nicaragua (Item 21 in the calculation of the "protection against collective dismissals of regular workers" indicator) was adjusted from 0 to 0.5. Finally, small changes were made in Figure 2.17, as in some countries, the rate refl ected the percentage of employees who received job training out of the total population (15-64 years old) rather than out of employees of the same age group. Jamaica was excluded from this Figure, since the survey only contains data for the inactive population.The Spanish acronym for youths who are neither in education nor working is "NINIs"; the usual English acronym refers to youths "not in education, employment, or training" (or "NEETs"). However, translating NINIs as NEETs would not be accurate, as the household surveys in Latin America and the Caribbean (LAC) do not capture whether people are enrolled in training institutions. Therefore, this book does not use the standard English acronym NEET. The same applies to youths who are "neith...

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“…For example benefits increase more or less linearly in seniority. Holzmann, Pouget, Weber, and Vodopivec (2012) have compiled a detailed compendium of country mandates, and the relationship between mandated benefits at four years and those at twenty are illustrated in Figure 2A (for OECD countries with mandates and reported benefits at the two service levels).…”

Section: Large Establishments In Medium and Large Establishments Almentioning

confidence: 99%

“…Although these voluntary benefit schemes are not overly generous--one week or two weeks of pay per year of service is common, Parsons (2005c)- 1 The firing cost label appears to be used interchangeably between the costs that induce the distortions and the distortions themselves. 2 See for example the reviews and compendiums in Buechtemann (1992), Heckman and Pagés (2004), and Holzmann, Pouget, Weber, and Vodopivec. (2012), and the review in Parsons (2012a).…”

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Understanding severance pay

Parsons

2013

Cuadernos de Economía

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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. www.econstor.eu Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S ABSTRACTUnderstanding Severance Pay * 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 displacement insurance packages, serving both as scheduled reemployment wage insurance and, if search moral hazard is a problem, as scheduled UI. Like any firm-financed separation expenditure, severance pay can induce excessive job retention, but such distortions do not appear to be of practical significance at benefit levels typically mandated in the industrialized world. Moreover there is no evidence that firms attempt to avoid these firing cost distortions by substituting severance savings plans, which have zero firing costs. Indeed severance insurance plans similar to those mandated are often offered voluntarily in the U.S. The appropriate role of government in the market for severance pay is briefly considered.

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Severance Pay Programs around the World: History, Rationale, Status, and Reforms

Cited by 40 publications

References 44 publications

Living arrangements in Europe: whether and why paternal retirement matters

Living arrangements in Europe: whether and why paternal retirement matters

Empleos para crecer

Understanding severance pay

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