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Job Security and the Age-Composition of Employment: Evidence from Chile

Carmen Pages and Claudio Montenegro

No 1093, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: This paper develops a simple model to analyze the impact of tenure-based severance payments on firms' hiring and firing decisions. The findings are that under certain conditions, this feature leads to a Last-in First-out firing policy. Also, reforms that increase the slope of the severance-tenure profile tend to increase the probabilities of dismissal of low tenure workers.

Keywords: WP-398 (search for similar items in EconPapers)
Date: 2010-10
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Journal Article: Job security and the age-composition of employment: evidence from Chile (2007) Downloads
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