Arbeitspapier

Welfare Benefit Reforms and Employment

We consider an economy characterised by involuntary unemployment among low skilled workers, and investigate the implications for employment and income of welfare schemes often advocated as less distortionary. We show that reducing unemployment benefits in favour of income subsidies (social benefits) reduces employment in general equilibrium and also the income of low skilled workers, for not too high distortions in the labour market. Furthermore, it leads to a higher tax burden and a welfare deterioration. To support employment, we suggest that systems grounded in contribution-based unemployment insurance schemes are to be preferred and strengthened.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 6403

Klassifikation
Wirtschaft
Taxation, Subsidies, and Revenue: General
Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
Unemployment Insurance; Severance Pay; Plant Closings
Thema
unemployment benefits
social benefits
taxes
unions
employment

Ereignis
Geistige Schöpfung
(wer)
Aloi, Marta
Lloyd-Braga, Teresa
Leite-Monteiro, Manuel
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2017

Handle
Letzte Aktualisierung
20.09.2024, 08:22 MESZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Aloi, Marta
  • Lloyd-Braga, Teresa
  • Leite-Monteiro, Manuel
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2017

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