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Unemployment Benefits (unemployment + benefit)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	82%

Selected Abstracts

Financing Unemployment Benefits: Dismissal versus Employment Taxes

LABOUR, Issue 3 2006
Florian Baumann
We compare dismissal and employment taxes in a model with search frictions. Employment taxes give rise to externalities because firms do not take into account the effects their dismissal decisions have on others. These externalities can be tackled by using dismissal taxes to finance unemployment insurance. Taking into account the budget for unemployment insurance, employment taxes can be reduced by more than is necessary to offset the adverse effect of dismissal taxes on the value of the firm. The introduction of dismissal taxes leads to higher job creation and lower unemployment. [source]

Labour market institutions and income inequality

ECONOMIC POLICY, Issue 56 2008
Daniele Checchi
SUMMARY Institutions and inequality Labour market institutions are a crucial determinant of wage inequality, the wage share in aggregate income, and the unemployment rate. Since these variables affect, in turn, the distribution of income across households, the question arises of whether stronger labour market institutions have an impact on income inequality. Institutions can in principle have conflicting effects. For example, a higher unemployment benefit tends to increase the wage share, which in turn reduces inequality, but it also increases the unemployment rate thus making the distribution of income more unequal. This paper examines what is the overall impact of labour market institutions on household income inequality. The evidence indicates that stronger institutions are associated with lower income inequality, but in some cases also with higher rates of unemployment. We explore the magnitude of this trade-off, and quantify the changes in inequality and unemployment that we would observe if a common labour standard were imposed on members of the European Union. , Daniele Checchi and Cecilia García-Peñalosa [source]

Population, Unemployment and Economic Growth Cycles: A Further Explanatory Perspective

METROECONOMICA, Issue 2-3 2003
Luciano Fanati
In this paper we investigate the dynamic interaction between economic growth, unemployment, income distribution and population growth. The reference framework combines rational behaviour of agents with endogenous fertility and unemployment, while profits are the determinant of the accumulation of firms. In particular the supply of labour is determined by the micro-founded fertility choices of individuals. We first demonstrate, consistently with the empirical evidence, the existence of a positive income growth trend with sustained oscillations, therefore providing an alternative explanation of the relation between growth and cycle. Moreover interesting results are given on the relation between unemployment and growth. So far the literature has traditionally shown a negative relation between unemployment and growth (with the exception of the positive relation arising in a Schumpeter ,creative' disruption context). In contrast, we find a twofold effect of unemployment (via its effects on population) on economic growth: this can be both positive or negative depending on the relative level of the cost of childrearing of employed and unemployed persons, and on the level of unemployment benefits. This allows us to argue that an increase in unemployment benefit,as has occurred in recent years in many countries such as France and Spain,could lead to wide demo-economic fluctuations and to a positive effect of unemployment on economic growth. [source]

Centralisation versus Decentralisation of Public Policies: Does the Heterogeneity of Individual Preferences Matter?,

FISCAL STUDIES, Issue 1 2008
Carlo Mazzaferro
This paper explores the role of the heterogeneity of fiscal preferences in the assignment of policy tasks to different levels of government (decentralisation versus centralisation). With reference to a sample of European countries, a median-voter mechanism of collective decision is assumed to work at both a national and a supranational level. Using data from a large international survey (the International Social Survey Programme, ISSP), a series of econometric models are estimated in order to make individual attitudes representative of different categories of public expenditure and of different countries. The dominance of decentralisation over centralisation or vice versa is determined on the basis of the utility loss that each individual suffers in connection with the distance between his or her own most preferred level of public expenditure and that chosen by the national/supranational median voter. The main finding is that, differently from the predictions of Oates's decentralisation theorem, the assignment of responsibilities at the supranational level (centralisation) for a number of public expenditure programmes (healthcare, education, unemployment benefits) dominates (or is close to dominating) decentralisation, even in the absence of economies of scale and interregional spillovers. However, when the possibility of interjurisdictional mobility is explicitly considered, in line with the predictions of Tiebout's model, decentralisation dominance becomes more and more substantial and also prevails in the sectors where, under the nonmobility assumption, the assignment of responsibilities at the supranational level is efficient. [source]

Labor Taxation in Search Equilibrium with Home Production

GERMAN ECONOMIC REVIEW, Issue 4 2002
Bertil Holmlund
Conventional models of equilibrium unemployment typically imply that proportional taxes on labor earnings are neutral with respect to unemployment as long as the tax does not affect the replacement rate provided by unemployment insurance, i.e. unemployment benefits relative to after,tax earnings. When home production is an option, the conventional results may no longer hold. This paper uses a search equilibrium model with home production to examine the employment and welfare implications of labor taxes. The employment effect of a rise in a proportional tax is found to be negative for sufficiently low replacement rates, whereas it is ambiguous for moderate and high replacement rates. Numerical calibrations of the model indicate that employment generally falls when labor taxes are raised. [source]

The ratification of ILO Conventions and the provision of unemployment benefits: An empirical analysis

INTERNATIONAL SOCIAL SECURITY REVIEW, Issue 1 2010
Wonik Kim
Abstract This article tests the relationship between the ratification of International Labour Organization (ILO) Conventions and the provision of unemployment benefits. Statistical tests focus on two related issues: why countries ratify ILO Conventions on unemployment benefits, and whether ratification influences government spending on unemployment benefits. The main findings are that democracy, region, income, and globalization are the main factors influencing why countries ratify ILO Conventions on unemployment benefits. In turn, the ratification of ILO Conventions is systematically associated with higher spending if countries have ratified more than two Conventions. [source]

The likelihood of a basic income in Germany

INTERNATIONAL SOCIAL SECURITY REVIEW, Issue 3 2008
Michael Opielka
Abstract The article discusses whether the likelihood of Germany introducing a basic income policy , that is independent of labour market participation , has increased in recent years. A brief description of the main elements of the German welfare state is followed by a critical analysis of more recent developments in guaranteeing a basic income, not least with the 2003 merger of unemployment benefits and social assistance. Since then the resulting fears of downward mobility felt even by the middle classes have reignited the 1980's debate about a basic income. Two models (the "basic income guarantee" and the "solidarity citizen's income") are used to discuss practical system design problems and the chances of realizing a basic income policy. [source]

Unemployment Determinants for Women in Spain

LABOUR, Issue 1 2000
Nieves Lázaro
Spain has one of the highest rates of unemployment among OECD countries. Some explanations for this stress the importance of unemployment duration compared with entry rates to the unemployment pool. Long-term unemployment rates are particularly high among women in Spain. The object of this paper is to investigate the determinants of unemployment duration among women. It will consider personal characteristics (education and age), family background, socio-economic variables (the number of household earners and household income) and the effect of unemployment benefits, using data from the Household Expenditure Survey 1990,91. [source]

Population, Unemployment and Economic Growth Cycles: A Further Explanatory Perspective

Semi-Nonparametric Estimation of an Equilibrium Search Model

OXFORD BULLETIN OF ECONOMICS & STATISTICS, Issue 3 2000
Pierre Koning
We specify and estimate an equilibrium job search model with productivity differences across labour market segments. The model allows for two types of unemployment: frictional unemployment due to search frictions and structural unemployment due to wage floors. Wage floors exist because of high unemployment benefits or binding minimum wages. The productivity distribution is estimated semi-nonparametrically along the lines of Gallant-Nychka, using Hermite series approximation. We decompose the total unemployment rate and we examine the effects of changes in the minimum wage. [source]

Disability Support Pension Recipients: Who Gets Off (and Stays Off) Payments?

THE AUSTRALIAN ECONOMIC REVIEW, Issue 1 2007
Lixin Cai
We use Centrelink payment records on Disability Support Pension (DSP) recipients over the period 1995 to 2002 to investigate individual transitions off payments. Our findings are consistent with the existence of a close correspondence between disability benefit receipt and labour market outcomes: entry to DSP via unemployment benefits is associated with substantially reduced prospects of exiting DSP, while employment during the DSP spell is associated with not only an increased probability of exiting DSP, but also more success in staying off payments once an exit has been made. A further finding of our analysis is that persons who exit DSP due to take-up of employment have a relatively high rate of return to payments compared with persons who exit for other reasons, and indeed exhibit a high propensity to cycle off and on payments. [source]

A New Specification of Labour Supply in the MONASH Model with an Illustrative Application

THE AUSTRALIAN ECONOMIC REVIEW, Issue 1 2003
Peter B. Dixon
MONASH is a dynamic general equilibrium model of the Australian economy. This article describes a new labour-market specification for MONASH in which people are allocated in year t to categories according to their labourmarket activities in year t , 1. People in each category plan their labour supplies by solving an optimisation problem. Via these problems, we introduce the assumption that people in employment categories supply labour more strongly to employment activities than do people in unemployment categories. Thus we find that employment-stimulating policies in t , 1 increase labour supply in t by shifting the composition of the labour force in t in favour of employment categories and away from unemployment categories. We illustrate this idea by using MONASH to simulate the Dawkins proposal to combine a freeze on award wage rates with tax credits for low-wage workers in low-income families. We find that the Dawkins policy would generate a significant short-run increase in employment. With the increase in employment generating an increase in labour supply, the employment benefits of the policy would persist over many years. However, in the long run, we would expect the effect of the policy on aggregate employment to be small and to depend on how the policy affected the ratio of real after-tax wage rates to unemployment benefits. [source]

REGIONAL UNEMPLOYMENT DISPARITIES: AN EVALUATION OF POLICY MEASURES,

AUSTRALIAN ECONOMIC PAPERS, Issue 4 2008
N. GROENEWOLD
This paper analyses the efficacy of regional and federal government policies in reducing inter-regional unemployment disparities. We use as our framework a two-region general equilibrium model with a given freely-mobile supply of labour. We assume inter-regional migration to occur in response to inter-regional utility differentials. Each region has households, firms and a regional government. In addition to regional governments, there is a federal government. The firms in a region use a single factor, labour, to produce a single good which we assume to be different to that produced in the other region. It is supplied to households and to the regional government in the form of payroll taxes. Households consume some, trade some with households in the other region and give some up to the federal government as income tax. Firms and households bargain over wages and firms then choose employment to maximise profits. The resulting equilibrium will generally not be a full-employment one. We simulate a linearised numerical version of the model. We examine seven alternative policies, six carried out by a regional government and one by the federal government. In the first group there are traditional tax/expenditure polices as well as policies which might be seen as attacking the natural rate of unemployment: changes in unemployment benefits, changes in union power, changes in the labour force and changes in labour productivity. The federal government policy is a regionally-differentiated fiscal policy. Contrary to expectations, many policies which have traditionally been recommended to alleviate unemployment are found, in fact, to exacerbate the unemployment problem. [source]

AN ANALYSIS OF DURATION ON THE DISABILITY SUPPORT PENSION PROGRAM,

AUSTRALIAN ECONOMIC PAPERS, Issue 2 2006
LIXIN CAI
The paper examines the factors that determine the duration on the Disability Support Pension (DSP) program using administrative data. We estimate two models based on two competing assumptions: the first model takes the standard assumption in duration models that all recipients will eventually leave the program. The second one takes into account the possibility that there may be some recipients who will never recover from their disabilities and hence not leave the program. Both models indicate that female recipients, recipients who enter DSP at a very young or very old age, recipients with a partner on income support, and recipients who transfer from unemployment benefits have the potential of a longer DSP duration. [source]

Labour Market Policies and Long-term Unemployment in a Flow Model of the Australian Labour Market

AUSTRALIAN ECONOMIC PAPERS, Issue 2 2003
Ric D. Herbert
This paper develops a general equilibrium job matching model, which is used to assess the impact of active labour market policies, reductions in unemployment benefits and reductions in worker bargaining power on long-term unemployment and other key macro variables. The model is calibrated using Australian data. Simulation experiments are conducted through impulse response analysis. The simulations suggest that active labour market programs (ALMPs) targeted at the long-term unemployed have a small net impact and produce adverse spillover effects on short-term unemployment. Reducing the level of unemployment benefits relative to wages and worker bargaining power have more substantial effects on total and long-term unemployment and none of the spillover effects of ALMPs. [source]

Unemployment and the Rental Rate of Capital

BULLETIN OF ECONOMIC RESEARCH, Issue 4 2000
Ricardo A. Lagos
This paper introduces a standard neoclassical production function in an equilibrium search model of the labour market, in order to analyse the effects that changes in the (exogenous) rental rate of capital have on the unemployment rate. When the number of firms is kept fixed, an increase in the rental rate affects unemployment only through its impact on selectivity, with the direction of the change depending on the size of the worker's unemployment benefits relative to the firm's search costs. Regardless of the behaviour of selectivity, when the number of firms is determined endogenously, an increase in the rental rate always increases unemployment through a process of job destruction. [source]