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International Capital Mobility in the Presence of Unemployment Insurance

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  • Doris Geide--Stevenson

    (Weber State University, Ogden, USA)

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    Abstract

    The paper develops a general--equilibrium model with layoff unemployment to examine the effect of different unemployment insurance policies on international capital mobility. Conditions are derived under which capital will flow to the high--benefit country. Incentives for international capital movements are unaffected by how the burden of financing unemployment benefits is distributed between workers and firms. It is shown that capital outflows might have positive welfare effects for workers. This contrasts with results from standard models of international factor movements. Copyright Blackwell Publishing Ltd. 2003

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    Bibliographic Info

    Article provided by Wiley Blackwell in its journal Review of International Economics.

    Volume (Year): 11 (2003)
    Issue (Month): 1 (February)
    Pages: 193-205

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    Handle: RePEc:bla:reviec:v:11:y:2003:i:1:p:193-205

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