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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)

  • 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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  • Compensating displaced workers

    Uncoordinated unemployment insurance and severance pay do a poor job of insuring against losses resulting from job displacement

    Donald O. Parsons, September 2018
    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.
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