Cash-on-Hand and the Duration of Job Search: Quasi-Experimental Evidence from Norway.

Konferenzbeitrag

We identify the causal effect of lump-sum severance payments on non-employment duration in Norway by exploiting a discontinuity in eligibility at age 50. We find that a severance payment worth 1.2 months' earnings at the median lowers the fraction re-employed after a year by six percentage points. Data on household wealth enable us to verify that the effect is decreasing in prior wealth, which favors an interpretation as liquidity constraints over the alternative of mental accounting. Finding liquidity constraints in Norway, despite its equitable wealth distribution and generous welfare state, means they are likely to exist also in other countries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2012: Neue Wege und Herausforderungen für den Arbeitsmarkt des 21. Jahrhunderts - Session: Transition out of Unemployment ; No. B18-V1

Classification and Topics

• Classification: Wirtschaft ; Duration Analysis; Optimal Timing Strategies ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Unemployment Insurance; Severance Pay; Plant Closings

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Basten, Christoph ; Fagereng, Andreas ; Telle, Kjetil
• Event: Veröffentlichung
• (when): 2012

Further information

• Handle: http://hdl.handle.net/10419/62085
• Last update: 10.03.2025, 11:42 AM CET