Employment and Welfare Effects of a Two-Tier Unemployment Compensation System View Full Text


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Article Info

DATE

2003-03

AUTHORS

Burkhard Heer

ABSTRACT

In Germany, as in many OECD countries, such as the United Kingdom, unemployment compensation consists of unemployment insurance and unemployment assistance. Unemployment assistance is provided subsequent to the expiration of entitlement to unemployment insurance and is lower. The effects of this two-tier unemployment compensation system are studied in a general equilibrium job search model with endogenous distributions of income, wealth, and employment which is calibrated with regard to the characteristics of the German economy. Our results are as follows: (i) employment is a decreasing function of both unemployment insurance and unemployment assistance. (ii) Aggregate savings are (not) a monotone decreasing function of unemployment assistance (unemployment insurance) payments. (iii) Optimal unemployment compensation payments are found to be a decreasing function over time. More... »

PAGES

147-168

References to SciGraph publications

  • 1997. The Future of Public Pensions in the Seven Major Economies in PENSION POLICIES AND PUBLIC DEBT IN DYNAMIC CGE MODELS
  • 1995-02. A life cycle analysis of social security in ECONOMIC THEORY
  • Journal

    TITLE

    International Tax and Public Finance

    ISSUE

    2

    VOLUME

    10

    Author Affiliations

    Identifiers

    URI

    http://scigraph.springernature.com/pub.10.1023/a:1023333822823

    DOI

    http://dx.doi.org/10.1023/a:1023333822823

    DIMENSIONS

    https://app.dimensions.ai/details/publication/pub.1047662722


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