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Monopoly union, unemployment benefits and labour taxes: The unemployment problem revisited

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  • Luca Gori

    ()
    (University of Pisa)

  • Luciano Fanti

    ()
    (University of Pisa)

Abstract

Unemployment is undoubtedly one of the most important concerns in developed countries, especially in Europe. Most of the related economic literature has discussed the possible influence of unemployment benefits on unemployment and welfare, assuming a lump-sum type benefit system, while the more realistic earnings-related (replacement rate) regime has been scarcely considered. Applying a fairly standard monopoly union model, we show that when unemployment benefit is related to the existing wage, the rate of unemployment can be reduced by increasing both the replacement rate and the labour tax.

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File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I1-P50.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 29 (2009)
Issue (Month): 1 ()
Pages: 482-490

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Handle: RePEc:ebl:ecbull:eb-08j60006

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  1. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
  2. Daveri, Francesco & Tabellini, Guido, 1997. "Unemployment, Growth and Taxation in Industrial Countries," CEPR Discussion Papers 1681, C.E.P.R. Discussion Papers.
  3. Booth,Alison L., 1994. "The Economics of the Trade Union," Cambridge Books, Cambridge University Press, number 9780521468398, October.
  4. Acemoglu, D. & Shimer, R., 1997. "Efficient Unemployment Insurance," Working papers 97-9, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Burkhard Heer, 2002. "Should Unemployment Benefits be Related to Previous Earnings?," CESifo Working Paper Series 747, CESifo Group Munich.
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