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Donald O. Parsons

George Washington University, USA, and IZA, Germany

IZA World of Labor role

Author

Current position

Professor of Economics, George Washington University, USA

Research interest

Labor economics, social insurance

Website

https://economics.columbian.gwu.edu/donald-o-parsons

Positions/functions as a policy advisor

Fellow at Global Labor Organization and Public Policy Scholar at George Washington Institute for Public Policy

Past positions

Professor of Economics, Ohio State University, USA (1977–1995); Associate Professor, Ohio State University, USA (1973–1977)

Qualifications

PhD Economics, University of Chicago, 1970

Selected publications

  • "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.

article(s)

  • Compensating displaced workers Updated

    Job displacement is a serious earnings risk and the displaced are typically poorly insured

    Donald O. Parsons, February 2024
    Job displacement is a serious earnings risk to long-tenured workers, both through spells of unemployment and through reduced wages on subsequent jobs. Less developed countries often rely exclusively on government mandated employer-provided severance pay to protect displaced workers. Higher income countries usually rely on public unemployment insurance and mandated severance pay. Beyond these options, more administratively demanding plans have been proposed, including UI savings accounts and “actual loss” wage insurance, though real-world experience on either model is lacking.
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  • How should job displacement wage losses be insured? Updated

    Wage losses upon re-employment can seriously harm long-tenured displaced workers if they are not properly insured

    Donald O. Parsons, July 2023
    Job 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), although it is provided only voluntarily in others, including the US. 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, but more uncertainty, of success.
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