Voluntary income sharing and the design of unemployment insurance
AbstractThis paper uses a model of search unemployment to discuss the interaction between publicly provided insurance and informal insurance through voluntary income sharing, e.g., between spouses. Income sharing reduces the optimal level of public unemployment insurance. While it is always individually rational for partners to share income, the effect of voluntary income sharing on welfare will be negative unless partners can either observe each other's search behavior or are sufficiently altruistic towards each other. The model is also used to examine a family-based policy. The welfare gains from using such policy are argued to be small. Copyright Springer-Verlag Berlin Heidelberg 2003
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Bibliographic InfoArticle provided by Springer in its journal Journal of Population Economics.
Volume (Year): 16 (2003)
Issue (Month): 1 (02)
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Find related papers by JEL classification:
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
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