Unemployment insurance versus welfare payments: a dynamic CGE analysis of employment and welfare effects
By: Heer, Burkhard.
Material type:
ArticlePublisher: 1997Description: p.367-93.Subject(s): Employment | Social security
In:
Public FinanceSummary: The effects of the social insurance system on employment and welfare are analyzed in a dynamic computable general equilibrium model. Two instruments of the social insurance system are considered: unemployment compensation, which is only paid to unemployed agents searching for a job, and welfare payments, which are paid to unemployed agents simply enjoying leisure. The model is calibrated for the German economy in order to get an estimate of the quantitative effects resulting from a change in the social insurance system. While welfare payments are shown to decrease both employment and welfare, this might not always be the case for unemployment insurance benefits. In facts, there is a nonzero optimal amount of unemployment insurance benefits. The welfare gains from a change in the social insurance system are proven to be substantial even after adjusting for transitional effects. - Reproduced.
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Articles
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Indian Institute of Public Administration | Volume no: 52, Issue no: 3-4 | Available | AR51887 |
The effects of the social insurance system on employment and welfare are analyzed in a dynamic computable general equilibrium model. Two instruments of the social insurance system are considered: unemployment compensation, which is only paid to unemployed agents searching for a job, and welfare payments, which are paid to unemployed agents simply enjoying leisure. The model is calibrated for the German economy in order to get an estimate of the quantitative effects resulting from a change in the social insurance system. While welfare payments are shown to decrease both employment and welfare, this might not always be the case for unemployment insurance benefits. In facts, there is a nonzero optimal amount of unemployment insurance benefits. The welfare gains from a change in the social insurance system are proven to be substantial even after adjusting for transitional effects. - Reproduced.
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