Severance Payments for Dismissed Employees in Germany

Christian Grund

No 4/2004, Bonn Econ Discussion Papers from University of Bonn, Bonn Graduate School of Economics (BGSE)

Abstract: This contribution investigates severance payments for dismissed employees in Germany. Particularly, it responds to the following questions: Who receives severance payments? By which characteristics is the level of severance payments determined? Is overcompensation to be considered a relevant issue? Hereby, individual and collective dismissals are distinguished. This is the first study on this issue using individual representative data ­ the German Socio-Economic Panel ­ and multivariate methods. The results indicate that rather women, persons with many years of tenure and working in big firms receive severance payments. There is a huge variance in the size of the payments, which can only partly be explained by tenure, the wage and citizenship. About one quarter of dismissed employees is better off in their following careers independent of having received a severance payment.

Keywords: Severance Payments; Dismissals; Plant closings; Dismissal Protection (search for similar items in EconPapers)
JEL-codes: J32 J53 J65 M51 M52 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Severance payments for dismissed employees in Germany (2006)
Working Paper: Severance Payments for Dismissed Employees in Germany (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bonedp:42004

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