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.
74-92
Tonin, Mirco
2929ca00-ca4e-4eb3-bf2b-a5d233b80253
Kolm, Ann-Sofie
aa8fdd2e-e7d8-4b0f-8b9b-b90addd9ddaf
February 2011
Tonin, Mirco
2929ca00-ca4e-4eb3-bf2b-a5d233b80253
Kolm, Ann-Sofie
aa8fdd2e-e7d8-4b0f-8b9b-b90addd9ddaf
Tonin, Mirco and Kolm, Ann-Sofie
(2011)
In-work benefits and unemployment.
International Tax and Public Finance, 18 (1), .
(doi:10.1007/s10797-010-9148-6).
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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Published date: February 2011
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Local EPrints ID: 174579
URI: http://eprints.soton.ac.uk/id/eprint/174579
ISSN: 0927-5940
PURE UUID: b6e1ad67-b4c4-44cb-89dc-c739db20c3b5
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Date deposited: 15 Feb 2011 10:07
Last modified: 14 Mar 2024 02:34
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Author:
Mirco Tonin
Author:
Ann-Sofie Kolm
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