General Equilibrium Effects of Unemployment Compensation with Labor Force Participation
AbstractThis article examines the effects of unemployment compensation when the size of the labor force depends on unemployment benefits. The analysis is based on an aggregate model with search and matching in which unemployment compensation affects the wage determination process and the number of jobs and workers. As with partial equilibrium models, unemployment compensation raises the unemployment rate and the ratio of unemployed to vacancies. However, wages may go up or down and firms may be better-off. Generally, employed workers are worse-off. Unemployment compensation transfers income from employed factors to unemployed factors, leading to greater input levels. Copyright 1995 by University of Chicago Press.
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Labor Economics.
Volume (Year): 13 (1995)
Issue (Month): 4 (October)
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Other versions of this item:
- Michael Sattinger, 1993. "General Equilibrium Effects of Unemployment Compensation with Labor Force Participation," Discussion Papers 93-03, University at Albany, SUNY, Department of Economics.
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- Michael Sattinger, 2003.
"A Kaldor Matching Model of Real Wage Declines,"
03-04, University at Albany, SUNY, Department of Economics.
- Pietro Garibaldi & Etienne Wasmer, 2005.
"Equilibrium Search Unemployment, Endogenous Participation and Labor Market Flows,"
Sciences Po publications
info:hdl:2441/8921, Sciences Po.
- Pietro Garibaldi & Etienne Wasmer, 2005. "Equilibrium Search Unemployment, Endogenous Participation, And Labor Market Flows," Journal of the European Economic Association, MIT Press, vol. 3(4), pages 851-882, 06.
- Garibaldi, Pietro & Wasmer, Etienne, 2003. "Equilibrium Search Unemployment, Endogenous Participation and Labour Market Flows," CEPR Discussion Papers 3986, C.E.P.R. Discussion Papers.
- Falk, Armin & Huffman, David B. & Sunde, Uwe, 2006. "Do I Have What It Takes? Equilibrium Search with Type Uncertainty and Non-Participation," IZA Discussion Papers 2531, Institute for the Study of Labor (IZA).
- Garibaldi, Pietro & Wasmer, Etienne, 2001. "Labor Market Flows and Equilibrium Search Unemployment," IZA Discussion Papers 406, Institute for the Study of Labor (IZA).
- Michael Sattinger, 2002. "A Queuing Model of the Market for Access to Trading Partners," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(2), pages 533-548, May.
- Mário Centeno & Márcio Corrêa, 2006. "Job Matching, Unexpected Obligations And Retirement Decisions," Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] 159, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
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