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
University of Southampton
Kolm, Ann-Sofie
aa8fdd2e-e7d8-4b0f-8b9b-b90addd9ddaf
Tonin, Mirco
2929ca00-ca4e-4eb3-bf2b-a5d233b80253
March 2010
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
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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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