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Unemployment Compensation Finance and Efficiency Wages

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  • Albrecht, James W
  • Vroman, Susan B

Abstract

This article examines the effects of unemployment compensation finance in a labor market in which firms pay efficiency wages. Two self-financing unemployment compensation systems are compared: one in which benefits are financed by a proportional payroll tax and another in which experience rating is introduced by taxing firms in proportion to their separations. The authors find that experience rating leads to less unemployment, less shirking, and higher output. Copyright 1999 by University of Chicago Press.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 17 (1999)
Issue (Month): 1 (January)
Pages: 141-67

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Handle: RePEc:ucp:jlabec:v:17:y:1999:i:1:p:141-67

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Web page: http://www.journals.uchicago.edu/JOLE/

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Cited by:
  1. Daniel Cardona & Fernando Sánchez-Losada, 2004. "The Unemployment Benefit System: a Redistributive or an Insurance Institution?," DEA Working Papers 8, Universitat de les Illes Balears, Departament d'Economía Aplicada.
  2. Peter Hans Matthews, 2005. "Labor Discipline, Reputation and Underemployment Traps," Middlebury College Working Paper Series 0501, Middlebury College, Department of Economics.
  3. Pierre Cahuc & Franck Malherbet, 2001. "Unemployment Compensation Finance and Labor Market Rigidity," Working Papers 2001-37, Centre de Recherche en Economie et Statistique.
  4. Helge Sanner, 2001. "Regional Unemployment Insurance," Volkswirtschaftliche Diskussionsbeiträge 41, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.
  5. L'Haridon, Olivier & Malherbet, Franck, 2009. "Employment protection reform in search economies," European Economic Review, Elsevier, vol. 53(3), pages 255-273, April.
  6. Jon Strand, 2002. "Effects of Progressive Taxes under Decentralized Bargaining and Heterogeneous Labor," International Tax and Public Finance, Springer, vol. 9(2), pages 195-210, March.
  7. Altenburg, Lutz & Straub, Martin, 2001. "Taxes on labour and unemployment in a shirking model with union bargaining," Labour Economics, Elsevier, vol. 8(6), pages 721-744, December.
  8. Bo Sandemann Rasmussen, . "Efficiency Wages and the Long-Run Incidence of Progressive Taxation," Economics Working Papers 2001-5, School of Economics and Management, University of Aarhus.
  9. Bo Sandemann Rasmussen, . "Long Run Effects of Employment and Payroll Taxes in an Efficiency Wage Model," Economics Working Papers 1997-8, School of Economics and Management, University of Aarhus.
  10. Julia Fath & Clemens Fuest, 2005. "Experience Rating of Unemployment Insurance in the US: A Model for Europe?," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 3(2), pages 45-50, 07.

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