Discussion paper

DP10711 Employment and Wage Insurance within Firms: Worldwide Evidence

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.


Pagano, M, A Ellul and F Schivardi (2015), ‘DP10711 Employment and Wage Insurance within Firms: Worldwide Evidence‘, CEPR Discussion Paper No. 10711. CEPR Press, Paris & London. https://cepr.org/publications/dp10711