Layoff Costs and Efficiency with Asymmetric Information
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.
Domains
Economics and Finance
Origin : Files produced by the author(s)
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