How should job displacement wage losses be insured?

Donald Parsons

World of Labour, 2023, No 446v2, 446

Abstract: Job displacement represents a serious earnings risk to long-tenured workers through lower re-employment wages, and these losses may persist for many years. Moreover, this risk is often poorly insured, although not for a lack of policy interest. To reduce this risk, most countries mandate scheduled wage insurance (severance pay), although it is provided only voluntarily in others, including the US. Actual-loss wage insurance is uncommon, although perceived difficulties may be overplayed. Both approaches offer the hope of greater consumption smoothing, with actual-loss plans carrying greater promise, but more uncertainty, of success.

Keywords: instruction time; heterogeneous returns; implementation challenges; education reforms (search for similar items in EconPapers)
JEL-codes: J63 J65 (search for similar items in EconPapers)
Date: 2023
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Journal Article: How should job displacement wage losses be insured? (2018)
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