Working Papers

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

CODE: WP-398
AUTHOR(s): Montenegro, Claudio , Pagés-Serra, Carmen
PUBLISHED: September 1999
RELATED TOPICS: Macroeconomics


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.

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