The Effects of Unemployment Benefits on Wage Determination PDF Download

Author: Paola Rota
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Author: Mr.Mauro Roca
Publisher: International Monetary Fund
ISBN: 1451873352
Category : Business & Economics
Languages : en
Pages : 39

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This paper develops a general equilibrium model with unemployment and noncooperative wage determination to analyze the importance of incomplete markets when risk-averse agents are subject to idiosyncratic employment shocks. A version of the model calibrated to the U.S. shows that market incompleteness affects individual behavior and aggregate conditions: it reduces wages and unemployment but increases vacancies. Additionally, the model explains the average level of unemployment insurance observed in the U.S. A key mechanism is the joint influence of imperfect insurance and risk aversion in the wage bargaining. The paper also proposes a novel solution to solve this heterogeneous-agent model.

Author: Christopher A. Pissarides
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 52

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Author: Andrew J. Oswald
Publisher:
ISBN:
Category : Crises
Languages : en
Pages : 36

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Author: United States. National Commission on Unemployment Compensation
Publisher:
ISBN:
Category : Insurance, Unemployment
Languages : en
Pages : 352

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Author: David G. Blanchflower
Publisher: MIT Press
ISBN: 9780262023757
Category : Business & Economics
Languages : en
Pages : 504

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The Wage Curve casts doubt on some of the most important ideas in macroeconomics, labor economics, and regional economics. According to macroeconomic orthodoxy, there is a relationship between unemployment and the rate of change of wages. According to orthodoxy in labor economics and regional economics an area's wage is positively related to the amount of joblessness in the area. The Wage Curve suggests that both these beliefs are incorrect. Blanchflower and Oswald argue that the stable relationship is a downward-sloping convex curve linking local unemployment and the level of pay. Their study, one of the most intensive in the history of social science, is based on random samples that provide computerized information on nearly four million people from sixteen countries. Throughout, the authors systematically present evidence and possible explanations for their empirical law of economics.

Author:
Publisher:
ISBN:
Category : Unemployment insurance
Languages : en
Pages : 352

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Author: Arlene Holen
Publisher:
ISBN:
Category : Unemployed
Languages : en
Pages : 66

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Author: David J. Smyth
Publisher:
ISBN:
Category : Unemployment
Languages : en
Pages : 38

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The paper analyses the effects of unemployment benefits in the United States private non-farm sector during the period 1948 to 1982. It is first shown that microeconomics studies yield only part of the total effect of unemployment benefit changes and that existing time series analyses are unsatisfactory because they neglect dynamic disequilibrium behavior. A labor demand and supply model which specifically allows for dynamic diequilibrium behavior is set up. Real wage rates do not adjust speedily enough to clear the labor market within a year; to allow for this, real wage adjustments are modelled using a Bowden partial adjustment process. In diequilibrium, employ is determined using the short side of the market assumption. The estimation procedure is full information maximum likelihood. Changes in real employment benefits have significant and substantial effects on real wages, employment and unemployment. A moderate increase in real unemployment benefits causes a marked rise in the equilibrium real wage rate, a marked fall in the non-farm sector's equilibrium employment level, and marked increase in the unemployment rate. In response to the increase in benefits employment follows a time path that overshoots the new equilibrium level; the unemployment rate will overshoot also or else the equilibrium unemployed effect is greater than the employment effect. The paper's conclusion is that unemployment benefits are an important influence in the U.S. labor market and are an important cause of U.S. unemployment.

Author: Laszlo Goerke
Publisher: Springer Science & Business Media
ISBN: 1461507871
Category : Business & Economics
Languages : en
Pages : 308

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This chapter has set out in detail the models which are employed below in order to analyse the labour market effects of changes in tax rates and in alterations in the tax structure. The fundamental mechanisms underlying the different approaches have been pointed out. Moreover, vital assumptions have been emphasised. By delineating the models which are used for the subsequent analyses, implicitly statements have also been made about topics or aspects which this study does not cover. For example, all workers and firms are identical ex ante. However, ex-post differences are allowed for, inter alia, if unemploy ment occurs or if some firms have to close down. These restrictions indicate areas of future research insofar as that the findings for homogeneous workers or firms yield an unambiguous proposal for changes in tax rates or the tax structure in order to promote employment. This is because it would be desir able for tax policy to know whether the predicted effects also hold in a world with ex-ante heterogeneity. Furthermore, the product market has not played a role. Therefore, repercussions from labour markets outcomes on product demand - and vice versa - are absent. 55 Moreover, neither the process of capital accumulation, be it physical or human capital, nor substitution pos sibilities between labour and capital in the firms' production function are taken into account. Finally, international competition is not modelled.