Job Displacement Insurance: An Overview

Arbeitspapier

Earnings losses from permanent job separations are a serious threat to the financial security of long-tenured workers. Job displacement insurance is presumably designed to offset these losses, but evidence suggests that consumption smoothing among the long-tenured displaced is seriously incomplete, at least in lightly regulated labor markets. Unemployment and reemployment wage insurance could fully cover these losses, but are costly to provide. Severance pay has emerged as a supplemental, if much criticized, instrument. Moral hazard limitations on unemployment insurance generosity mean that severance pay functions as scheduled (partial) unemployment insurance and scheduled wage insurance. Consumption smoothing over time through savings and borrowing is less efficient than ideal insurance, but may be preferred in second-best situations. Long-tenured separated workers are older on average, which introduces special problems, but also additional policy options, including early access to retirement accounts.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 8223

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Unemployment Insurance; Severance Pay; Plant Closings ; Labor Contracts ; Compensation Packages; Payment Methods ; Labor Economics Policies
• Thema: job displacement ; unemployment insurance ; wage insurance ; severance pay ; insurance adequacy ; early retirement

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Parsons, Donald O.
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2014

Weitere Informationen

• Handle: http://hdl.handle.net/10419/99033
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ