Layoff Costs and Efficiency with Asymmetric Information

Alain Delacroix and Etienne Wasmer

SciencePo Working papers Main from HAL

Abstract: Wage determination under asymmetric information generates ine¢ ciencies due to excess turnover. Severance pay and layo¤ taxes can improve e¢ ciency. We show that inefficient separations can even be fully removed with xed separation taxes in the case where therelevant private information is exponentially distributed.

Date: 2009-09-04
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Related works:
Working Paper: Layoff Costs and Efficiency with Asymmetric Information (2009)
Working Paper: Layoff Costs and Efficiency with Asymmetric Information (2009)
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