Search , Self - Insurance and Job - Security Provisions By : Fernando Alvarez and Marcelo


We construct a general equilibrium model to evaluate the quantitative e¤ects of severance payments in the presence of contracting and reallocational frictions. Key elements of the model are: 1) establishment level dynamics, 3) imperfect insurance markets, and 4) variable search decisions. Contrary to previous studies that analyzed severance payments in… (More)


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