Arbeitspapier

Time Limits in a Two-tier Unemployment Benefit Scheme under Involuntary Unemployment

The consequences of introducing or tightening time limits on receiving high unemploymentbenefits are studied in a shirking model. Stricter time limits have an ambiguousimpact on the net wage, and changes of utility levels of employed workers and recipientsof high unemployment benefits have the same sign as the variation in the netwage. The utility differential between the two groups of unemployed shrinks. The relativeincome position of skilled workers moves in the same direction as the net wage ofunskilled workers. When access to high benefits is denied for caught shirkers, strictertime limits may decrease employment.

Language
Englisch

Bibliographic citation
Series: ifo Working Paper ; No. 29

Classification
Wirtschaft
National Government Expenditures and Welfare Programs
Labor Contracts
Mobility, Unemployment, Vacancies, and Immigrant Workers: General
Subject
Unemployment benefits
welfare benefits
time limits
efficiency wages

Event
Geistige Schöpfung
(who)
Holzner, Christian
Meier, Volker
Werding, Martin
Event
Veröffentlichung
(who)
ifo Institute - Leibniz Institute for Economic Research at the University of Munich
(where)
Munich
(when)
2006

Handle
Last update
10.03.2025, 11:45 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Holzner, Christian
  • Meier, Volker
  • Werding, Martin
  • ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Time of origin

  • 2006

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