Fachartikel

Redundancy Pay and Collective Dismissals

Redundancy payments for collective dismissals are incorporated into a

Shapiro-Stiglitz model of efficiency wages. It is shown that a fixed payment

will lower wages, leave employment and welfare unaffected if there are no

wage-dependent taxes, no additional firing costs and if unemployment

benefits are not altered by redundancy payments. If payroll taxes exceed

firing costs and unemployment benefits are independent of redundancy pay,

employment and welfare will rise with redundancy payments. If these

payments are also a function of previous wages, positive employment effects

will be mitigated. A substitution of wage-dependent for lump-sum redundancy

payments can lower employment, allowing for a continuous variation of

effort.
Working Paper
2005
Fachbereich
Volkswirtschaftslehre
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Bücher des Autors
Buch Cover

Volkswirtschaftslehre, Volkswirtschaftspolitik

Taxes and Unemployment: Collective Bargaining and Efficiency Wage Models
Buch Cover

Volkswirtschaftslehre, Volkswirtschaftspolitik

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