George Washington University, USA, and IZA, Germany
IZA World of Labor role
Professor of Economics, George Washington University, USA
Labor economics, social insurance
Positions/functions as a policy advisor
Fellow at Global Labor Organization and Public Policy Scholar at George Washington Institute for Public Policy
Professor of Economics, Ohio State University, USA (1977–1995); Associate Professor, Ohio State University, USA (1973–1977)
PhD Economics, University of Chicago, 1970
"Job displacement insurance." In: Wright, J. (ed.). International Encyclopedia of the Social and Behavioral Sciences, 2nd Edition. Oxford: Elsevier, 2015.
"Understanding severance pay." Spanish Journal of Economics and Finance 36:106 (2013): 155–165.
"Mandated severance pay and firing cost distortions: A critical review of the evidence." In: Holzmann, R., and M. Vodopivec (eds). Reforming Severance Pay: An International Perspective. Washington, DC: World Bank, 2012; pp.121–157.
"Wage insurance: A policy review." Research in Employment Policy 2 (2000): 119–140.
"The employment relationship: Job attachment, work effort, and the nature of contracts." In: Ashenfelter, O., and R. Layard (eds). Handbook of Labor Economics, Vol. II. Amsterdam: North Holland Press, 1986; pp. 789–848.
This is a revision of the original article.Donald O. Parsons, September 2018This is a revision of the original article. Job displacement poses a serious earnings threat to long-tenured workers through unemployment spells and lower re-employment wages. The prevailing method of insuring job displacement losses involves an uncoordinated combination of unemployment insurance and severance pay. Less developed countries often rely exclusively on public mandating of employer severance pay due to the administrative complexity of unemployment insurance systems. If both options are operational, systematic integration of the two is important, although perhaps not possible if severance pay is voluntarily provided.MoreLess
Wage losses upon re-employment can seriously harm long-tenured displaced workers if they are not properly insuredDonald O. Parsons, June 2018Job displacement represents a serious earnings risk to long-tenured workers through lower re-employment wages, and these losses may persist for many years. Moreover, this risk is often poorly insured, although not for a lack of policy interest. To reduce this risk, most countries mandate scheduled wage insurance (severance pay), and it is voluntarily provided in others. Actual-loss wage insurance is uncommon, although perceived difficulties may be overplayed. Both approaches offer the hope of greater consumption smoothing, with actual-loss plans carrying greater promise.MoreLess