Part-time unemployment and optimal unemployment insurance

Arbeitspapier

A significant fraction of the labor force consists of employed workers who are part-time unemployed (underemployed) in the sense that they are unable to work as much as they prefer. This paper develops a search and matching model to study the design of optimal unemployment insurance in an economy with unemployment as well as part-time unemployment. Part-time unemployment provides income insurance and serves as a stepping stone to full-time jobs. Unemployment benefits for part-timers increase the outflow from unemployment to part-time work but reduce the outflow from part-time work to full-time employment. We examine the optimal structure of benefits for unemployed and underemployed workers. The results indicate non-negligible welfare gains associated with time limits for unemployment benefits as well as for part-time benefits. The welfare gains from optimal UI are larger when wages are fixed than when they are flexible.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 5540

Classification and Topics

• Classification: Wirtschaft ; Unemployment: Models, Duration, Incidence, and Job Search ; Unemployment Insurance; Severance Pay; Plant Closings
• Subject: job search ; part-time unemployment ; unemployment insurance ; Teilzeitarbeit ; Arbeitslosigkeit ; Unterbeschäftigung ; Arbeitslosenversicherung ; Arbeitsplatzsuchmodell ; Wohlfahrtseffekt ; Theorie

Contributors, Location and Time

• Event: Geistige Schöpfung
• (who): Ek, Susanne ; Holmlund, Bertil
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/51861
• URN: urn:nbn:de:101:1-201104133432
• Last update: 10.03.2025, 11:44 AM CET