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Pareto-Improving Unemployment Policies

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Author Info
Jörg Lingens
Klaus Wälde

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Abstract

We investigate how continental European unemployment can be reduced without reducing unemployment benefits and without reducing the net income of low-wage earners. Lower unemployment replacement rates reduce unemployment, the net wage, and unemployment benefits. A lower tax on labor increases net wages and unemployment benefits. Combining these two policies allows one to reduce unemployment without reducing the net income of workers or of the unemployed. Such a policy becomes self-financing under realistic parameter constellations when taxes are reduced only for low-income workers.

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Publisher Info
Article provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.

Volume (Year): 65 (2009)
Issue (Month): 2 (June)
Pages: 220-245
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Handle: RePEc:mhr:finarc:urn:sici:0015-2218(200906)65:2_220:pup_2.0.tx_2-l

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Related research
Keywords: income level; unemployment; taxation; policy reform;

Other versions of this item:

Find related papers by JEL classification:
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Koskela, Erkki & Poutvaara, Panu, 2008. "Outsourcing and Labor Taxation in Dual Labor Markets," IZA Discussion Papers 3522, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. Laszlo Goerke & Markus Pannenberg & Heinrich W. Ursprung, 2007. "A Positive Theory of the Earnings Relationship of Unemployment Benefits," IZA Discussion Papers 3003, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Jörg Lingens & Klaus Wälde, 2007. "Pareto-Improving Unemployment Policies," Working Papers 2007_34, Department of Economics, University of Glasgow. [Downloadable!]
    Other versions:
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This page was last updated on 2009-11-3.

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