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The Effects of Unemployment Compensation in General Equilibrium with Search Unemployment

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Author Info
Axell, Bo
Lang, Harald
Abstract

It is shown that when the effects of an increase in unemployment subsidies are studied in a general equilibrium framework, unemployment increases far less than in a "partial-partial" model. In fact, the result may very well be a decrease in unemployment if the "general equilibrium forces" are strong enough. In the model used in this paper, an increase in unemployment compensation unambiguously decreases the rate of unemployment. Copyright 1990 by The editors of the Scandinavian Journal of Economics.

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Publisher Info
Article provided by Blackwell Publishing in its journal Scandinavian Journal of Economics.

Volume (Year): 92 (1990)
Issue (Month): 4 ()
Pages: 531-40
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Handle: RePEc:bla:scandj:v:92:y:1990:i:4:p:531-40

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  1. Carling, Kenneth & Holmlund, Bertil & Vejsiu, Altin, 1999. "Do benefit cuts boost job findings? Swedish evidence from the 1990s," Working Paper Series 1999:8, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
    Other versions:
  2. Holmlund, Bertil, 1997. "Unemployment Insurance in Theory and Practice," Working Paper Series 1997:25, Uppsala University, Department of Economics. [Downloadable!]
    Other versions:
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