Building blocks in the economics of mandates
AbstractThe paper constructs an asymmetric information model to investigate the efficiency and equity cases for government mandated benefits. A mandate can improve workers' insurance, and may also redistribute in favour of more "deserving" workers. The risk is that it may also reduce output. The more diverse are free market contracts â separating the various worker types â the more likely it is that such output effects will on balance serve to reduce welfare. It is shown that adverse effects can be reduced by restricting mandates to larger firms. An alternative to a mandate is direct government provision. We demonstrate that direct government provision has the advantage over mandates of preserving separations.
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Bibliographic InfoArticle provided by Springer in its journal Portuguese Economic Journal.
Volume (Year): 5 (2006)
Issue (Month): 2 (August)
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Web page: http://link.springer.de/link/service/journals/10258/index.htm
Other versions of this item:
- John T. Addison & C. R. Barrett & W. S. Siebert, 2005. "Building Blocks in the Economics of Mandates," GEMF Working Papers 2005-16, GEMF - Faculdade de Economia, Universidade de Coimbra.
- Addison, J.T. & Barrett, C.R. & Siebert, W.S., 2000. "Building Blocks in the Economics of Mandates," Discussion Papers 00-07, Department of Economics, University of Birmingham.
- Addison, John T. & Barrett, C. R. & Siebert, W. Stanley, 2005. "Building Blocks in the Economics of Mandates," IZA Discussion Papers 1866, Institute for the Study of Labor (IZA).
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
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