Severance pay cuts prompt workers to seek new job opportunities.
The study looked at how changes in severance pay affect workers' decisions to change jobs. By analyzing a labor market reform in Spain, researchers found that lower severance pay made workers more likely to leave their jobs voluntarily, especially if they thought they might be laid off soon. This shows that policies affecting employers can also impact workers' choices. The study highlights the importance of considering how laws protecting workers and unemployment benefits interact.