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| Type | Working Paper |
| Scope | Discipline-based scholarship |
| Title | Job mobility and creative destruction: flexicurity in the land of Schumpeter |
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| Institution | University of Zurich |
| Series Name | Working paper series / Department of Economics |
| Number | 256 |
| ISSN | 1664-7041 |
| Number of Pages | 30 |
| Date | 2017 |
| Abstract Text | This paper evaluates the 2003 Austrian severance-pay reform, often advocated as a role model for structural reforms in countries plagued by inflexible labor markets and high unemployment. The reform replaced a system with tenure-based severance payments after a layoff (but not after a quit) by payments into pension accounts that accrue to workers after a layoff as well as after a quit. We identify the reform effects using a regression discontinuity (RD) design and find a substantial increase in job mobility in response to the reform. A search-and-matching model with on-the- job search and tenure-dependent severance payments is structurally estimated using the RD-induced empirical moments. Counterfactual policy experiments suggest that flexicurity reforms spur job creation and can substantially reduce unemployment in countries where severance payments are initially high. |
| Official URL | http://www.econ.uzh.ch/static/wp/econwp256.pdf |
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| Keywords | Severance pay, job mobility, flexicurity, Abfindung, Arbeitsplatzwechsel, Arbeitsmarkt, Flexibilisierung, Arbeitslosigkeit |
| Additional Information | Auch erschienen als CEPR Discussion Paper 12112 |