Discussion Paper Details

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Title: Employment and Wage Insurance within Firms: Worldwide Evidence

Author(s): Andrew Ellul, Marco Pagano and Fabiano Schivardi

Publication Date: July 2015

Keyword(s): family firms, insurance, risk-sharing, social security, unemployment and wages

Programme Area(s): Financial Economics

Abstract: We investigate the determinants of firms? implicit insurance to employees, using a difference-in-difference approach: we rely on differences between family and non-family firms to identify the supply of insurance, and exploit variation in unemployment insurance across and within countries to gauge workers? demand for insurance. Using a firm-level panel from 41 countries, we find that family firms feature more stable employment, greater wage flexibility and lower labor cost than non-family ones. Employment stability in family firms is greater, and the wage discount larger, in countries with more generous public unemployment insurance: private and public provision of employment insurance are substitutes.

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Bibliographic Reference

Ellul, A, Pagano, M and Schivardi, F. 2015. 'Employment and Wage Insurance within Firms: Worldwide Evidence'. London, Centre for Economic Policy Research.