Staying on the dole

Arbeitspapier

We develop a simple model of labor market participation, human capital degradation, and re-training. We focus on how non-participation, as a distinct state from unemployment and employment, is determined by the welfare system in interaction with labor market conditions and personal characteristics. We provide a tractable framework to analyze how the decisions to exit the labor force and to mitigate human capital degradation by re-training depend on a broad range of factors such as education, skill degradation, age, labor market shocks, labor taxes, unemployment insurance benefits and social assistance. We extend our framework by allowing for time-inconsistent choices and demonstrate the possibility of an unemployment trap.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Diskussionsbeitrag ; No. 377

Classification and Topics

• Classification: Wirtschaft ; Unemployment: Models, Duration, Incidence, and Job Search ; Wage Level and Structure; Wage Differentials ; Wages, Compensation, and Labor Costs: Public Policy
• Subject: Unemployment ; Non-Participation ; Skill Degradation ; Re-training ; Unemployment Bene?ts ; Social Assistance ; Present-Biased Preferences ; Theorie ; Theorie ; Arbeitslosigkeit ; Arbeitslosenversicherung ; Arbeitsuche

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Strulik, Holger ; Tyran, Jean-Robert ; Vanini, Paolo
• Event: Veröffentlichung
• (who): Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät
• (where): Hannover
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/27187