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In-work benefits and unemployment

In-work benefits and unemployment
In-work benefits and unemployment
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.
in-work benefits, search, labour force participation, wage adjustment
0966-4246
University of Southampton
Kolm, Ann-Sofie
aa8fdd2e-e7d8-4b0f-8b9b-b90addd9ddaf
Tonin, Mirco
2929ca00-ca4e-4eb3-bf2b-a5d233b80253
Kolm, Ann-Sofie
aa8fdd2e-e7d8-4b0f-8b9b-b90addd9ddaf
Tonin, Mirco
2929ca00-ca4e-4eb3-bf2b-a5d233b80253

Kolm, Ann-Sofie and Tonin, Mirco (2010) In-work benefits and unemployment (Discussion Papers in Economics and Econometrics) Southampton, UK. University of Southampton

Record type: Monograph (Discussion Paper)

Abstract

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.

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More information

Published date: March 2010
Keywords: in-work benefits, search, labour force participation, wage adjustment

Identifiers

Local EPrints ID: 80217
URI: http://eprints.soton.ac.uk/id/eprint/80217
ISSN: 0966-4246
PURE UUID: a646d1d8-d61c-44cc-9ec9-2e0e36a4b807

Catalogue record

Date deposited: 24 Mar 2010
Last modified: 22 Jul 2022 17:18

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Contributors

Author: Ann-Sofie Kolm
Author: Mirco Tonin

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