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Incentive Contracts and Efficient Unemployment Benefits

Demougin, Dominique ; Helm, Carsten :
Incentive Contracts and Efficient Unemployment Benefits.
[Online-Edition: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1351713]

[Report], (2009)

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Offizielle URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1351713

Kurzbeschreibung (Abstract)

European countries have reformed their labor market institutions. Incentive effects of unemployment benefits have been an important aspect of these reforms. We analyze this issue in a principal-agent model, focusing on unemployment levels and labor productivity. In our model, a higher level of unemployment benefits improves the worker's position in wage bargaining, leading to stronger effort incentives and higher output. However, it also reduces incentives for labor market participation. Accordingly, there is a trade-off. We analyze how changes in the economic environment such as globalization and better educated workers affect this trade-off.

Typ des Eintrags: Report
Erschienen: 2009
Autor(en): Demougin, Dominique ; Helm, Carsten
Titel: Incentive Contracts and Efficient Unemployment Benefits
Sprache: Englisch
Kurzbeschreibung (Abstract):

European countries have reformed their labor market institutions. Incentive effects of unemployment benefits have been an important aspect of these reforms. We analyze this issue in a principal-agent model, focusing on unemployment levels and labor productivity. In our model, a higher level of unemployment benefits improves the worker's position in wage bargaining, leading to stronger effort incentives and higher output. However, it also reduces incentives for labor market participation. Accordingly, there is a trade-off. We analyze how changes in the economic environment such as globalization and better educated workers affect this trade-off.

Fachbereich(e)/-gebiet(e): 01 Fachbereich Rechts- und Wirtschaftswissenschaften > Volkswirtschaftliche Fachgebiete > Angewandte Mikroökonomik und Institutionenökonomik
01 Fachbereich Rechts- und Wirtschaftswissenschaften > Volkswirtschaftliche Fachgebiete
01 Fachbereich Rechts- und Wirtschaftswissenschaften
Hinterlegungsdatum: 28 Apr 2009 14:05
Offizielle URL: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1351713
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