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Unemployment benefit generosity in a life-cycle model with endogenous job-serch effort
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.
2018 (English)Independent thesis Advanced level (degree of Master (Two Years)), 30 credits / 45 HE creditsStudent thesis
Abstract [en]

Unemployment in Austria has been considerably low in the past decades compared to other European countries. Nevertheless, recent increases in the past five years started a controversial discussion about the generous unemployment insurance system in place. The current government, therefore, argues to change the insurance system similar to the German HARTZ IV reform, although the effects on unemployment have proven to be ambiguous in Germany. I introduce a discrete time life-cycle model with endogenous job-search effort to inquire the potential effects of such a reform on long- and short-term unemployment, as well as individuals' job-search incentives. Individuals are ex-ante heterogeneous in their labour income possibilities and are subject to exogenous layoffs throughout their life. The model suggests that the proposed reform would reduce long-term unemployment substantially, however, to the cost of a larger amount of short-term unemployment spells and decreased overall welfare. Job-search effort over the whole life-cycle appears to increase, with the largest differences at the end of the life-cycle.

Place, publisher, year, edition, pages
2018. , p. 43
Keywords [en]
Life-cycle, unemployment insurance, job-search, effort, unemployment benefits, labour market reform
National Category
Economics
Identifiers
URN: urn:nbn:se:uu:diva-352203OAI: oai:DiVA.org:uu-352203DiVA, id: diva2:1212369
Educational program
Master Programme in Economics
Supervisors
Available from: 2018-06-27 Created: 2018-06-01 Last updated: 2018-06-27Bibliographically approved

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CiteExportLink to record
Permanent link

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Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
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