Severance Payments for Dismissed Employees in Germany

Arbeitspapier

This contribution investigates severance payments for dismissed employees in Germany. Subsequent to an overview about the legal framework, we respond to the following questions: Who receives severance payments? By which characteristics is the level of severance payments determined? Is overcompensation to be considered a relevant issue? Hereby, individual and collective dismissals are always distinguished. This is the first study on this issue using individual representative data – the German Socio-Economic Panel – and multivariate methods. The results indicate that rather women, persons with many years of tenure and working in big firms receive severance payments. There is a huge variance in the size of the payments, which can only partly be explained by tenure, the wage, firm size and the region. At least one quarter of dismissed employees is better off in their following careers independent of having received a severance payment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 875

Classification and Topics

• Classification: Wirtschaft ; Personnel Economics: Firm Employment Decisions; Promotions ; Labor-Management Relations; Industrial Jurisprudence ; Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions ; Personnel Economics: Compensation and Compensation Methods and Their Effects
• Subject: severance payments ; dismissals ; plant closings ; Abfindung ; Kündigung ; Humankapital ; Betriebszugehörigkeit ; Schätzung ; Deutschland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Grund, Christian
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/20116
• Last update: 10.03.2025, 11:42 AM CET