Mandated severance pay and firing cost distortions: A critical review of the evidence

摘要: Severance pay mandates are an appealing job displacement insurance strategy in developing countries, which have only modest government administrative capacities, but they carry the threat of adverse indirect effects. A critical review empirical literature reveals that severance benefit mandates, unaccompanied by other labor regulations, little apparent impact on market behaviors. Indeed many industrialized world do not greatly exceed those provided voluntarily larger firms U.S. Benefit sometimes more extravagant, and absence substantial effects may result from limited enforcement. Broader economic regulations appear to substantial, market, it is important equate these with simple plans.