Model Distraction: A Comment on Daveri and Tabellini
AbstractAn article by Francesco Daveri and Guido Tabellini (2000) combines empirics and a general-equilibrium overlapping-generations model to recommend the reduction of labor taxation and pension expenditures. I demonstrate that, in the model, unemployment would be zero if unemployment benefits remained between zero and a certain value that is dependent on the level of wage taxation. My demonstration leads to two questions: (1) Why should the government introduce unemployment benefits in an economy that otherwise would always operate at full employment? (2) Why is the reader led to believe that the reduction of labor taxation and pension expenditure are the main economic policy indications that derive from the model? Since, in the Daveri and Tabellini model, unemployment benefits are a waste of resources, the reduction of unemployment benefits is the best way to reduce unemployment.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Econ Journal Watch in its journal Econ Journal Watch.
Volume (Year): 10 (2013)
Issue (Month): 1 (January)
European unemployment; unemployment benefits; wage taxation; trade unions; pension system reform;
Find related papers by JEL classification:
- E2 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jason Briggeman) The email address of this maintainer does not seem to be valid anymore. Please ask Jason Briggeman to update the entry or send us the correct address.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.