In-work benefits and unemployment

Tonin, Mirco and Kolm, Ann-Sofie (2011) In-work benefits and unemployment. International Tax and Public Finance, 18, (1), 74-92. (doi:10.1007/s10797-010-9148-6).


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In-work benefits are becoming an increasingly relevant labour market policy, gradually expanding in scope and geographical coverage. This paper investigates the equilibrium impact of in-work benefits and contrasts it with the traditional partial equilibrium analysis. We find under which conditions accounting for equilibrium wage adjustments amplifies the impact of in-work benefits on search intensity, participation, employment, and unemployment, compared to a framework in which wages are fixed. We also account for the financing of these benefits and determine the level of benefits necessary to achieve efficiency in a labour market characterized by search externalities.

Item Type: Article
Digital Object Identifier (DOI): doi:10.1007/s10797-010-9148-6
ISSNs: 0927-5940 (print)
1573-6970 (electronic)
Alternative titles: In-work benefits in search equilibrium
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HJ Public Finance
J Political Science > JF Political institutions (General)
Divisions : University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 174579
Accepted Date and Publication Date:
February 2011Published
Date Deposited: 15 Feb 2011 10:07
Last Modified: 31 Mar 2016 13:33

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