Structural change, unemployment benefits and high unemployment: a U.S European comparison
Author: Burda, Michael C. INSEAD Area: Economics and Political Science Series: Working Paper ; 90/12/EPS Publisher: Fontainebleau : INSEAD, 1990.Language: EnglishDescription: 29 p.Type of document: INSEAD Working Paper Online Access: Click here Abstract: This paper reconsiders the position that unemployment benefits have played a subordinate role in the evolution of unemployment in Western Europe. First the theories that predict a positive relationship between equilibrium unemployment and level of unemployment benefits are briefly reviewed. While there is evidence of this relationship in the most recent decade, the puzzle lies in explaining the low levels of European unemployment in the 1960s and early 1970s, when these programmes were often just as generous. It is then shown that the sensitivity of unemployment to the inflow rate in Pissarides (1985) model of equilibrium unemployment is positively related to the level of unemployment benefits. This channel represents a potential explanation of the puzzle| Item type | Current location | Collection | Call number | Status | Date due | Barcode | Item holds |
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Digital Library | Available | BC000759 |
This paper reconsiders the position that unemployment benefits have played a subordinate role in the evolution of unemployment in Western Europe. First the theories that predict a positive relationship between equilibrium unemployment and level of unemployment benefits are briefly reviewed. While there is evidence of this relationship in the most recent decade, the puzzle lies in explaining the low levels of European unemployment in the 1960s and early 1970s, when these programmes were often just as generous. It is then shown that the sensitivity of unemployment to the inflow rate in Pissarides (1985) model of equilibrium unemployment is positively related to the level of unemployment benefits. This channel represents a potential explanation of the puzzle
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