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Voluntary Public Unemployment Insurance

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  • Donald O. Parsons
  • Torben Tranaes
  • Helene Bie Lilleør

Abstract

Voluntary public unemployment systems are limited to a handful of countries, including Finland, Sweden, and, more substantially, Denmark. A voluntary system has the positive feature of other user-cost schemes, potentially efficient targeting of services. This presumes rational behavior as well as reasonable risk rating of premiums and the absence of worker access to alternative social programs. Using a 10 per cent sample of the Danish population drawn from administrative data, we exploit the voluntary Danish system to explore the structure of unemployment insurance demand. The insurance take-up rate is surprisingly high, 80 percent in 1995, but varies systematically with economic incentives in a way that raises doubts about the targeting value of the current system. Political support for the Danish system may derive instead from the fact that a universal, compulsory system would generate rather modest additional net funds and with a twist--additional revenue would come disproportionately from low-wage workers.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1010.

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Date of creation: 2003
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Handle: RePEc:ces:ceswps:_1010

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References

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  1. Chamberlain, Gary, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Wiley Blackwell, vol. 47(1), pages 225-38, January.
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  7. Anderson, Patricia M & Meyer, Bruce D, 1997. "Unemployment Insurance Takeup Rates and the After-Tax Value of Benefits," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 913-37, August.
  8. Björklund, Anders & Holmlund, Bertil, 1986. "The Economics of Unemployment Insurance: The Case of Sweden," Working Paper Series 167, Research Institute of Industrial Economics.
  9. Michael D. Bordo & Claudia Goldin & Eugene N. White, 1998. "The Defining Moment: The Great Depression and the American Economy in the Twentieth Century," NBER Books, National Bureau of Economic Research, Inc, number bord98-1, October.
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  15. Paul Storer & Marc A. Van Audenrode, 1995. "Unemployment Insurance Take-Up Rates in Canada: Facts, Determinants, and Implications," Canadian Journal of Economics, Canadian Economics Association, vol. 28(4a), pages 822-35, November.
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Cited by:
  1. Torben Andersen & Michael Svarer, 2007. "Flexicurity – Labour Market Performance in Denmark," CESifo Working Paper Series 2108, CESifo Group Munich.
  2. Salazar, C, 2007. "Determinantes de la Adopción Voluntaria del Seguro de Cesantía
    [Determinants of Voluntary Adoptions of Unemployment Insurance]
    ," MPRA Paper 7693, University Library of Munich, Germany.
  3. repec:dgr:uvatin:2008065 is not listed on IDEAS
  4. Jespersen, Svend T. & Munch, Jakob R. & Skipper, Lars, 2008. "Costs and benefits of Danish active labour market programmes," Labour Economics, Elsevier, vol. 15(5), pages 859-884, October.
  5. Torben Andersen, 2003. "From Excess to Shortage - Recent Developments in the Danish Labour Market," CESifo Working Paper Series 933, CESifo Group Munich.
  6. Leschke, Janine, 2007. "Gender differences in unemployment insurance coverage: A comparative analysis," Discussion Papers, Research Unit: Labor Market Policy and Employment SP I 2007-106, Social Science Research Center Berlin (WZB).
  7. Anne Møller Danø & Mette Ejrnæs & Leif Husted, 2004. "Do Single Women Value Early Retirement more than Single Men?," CAM Working Papers 2004-06, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  8. Bartha, Zoltán & Sáfrányné Gubik, Andrea & Tóthné Szita, Klára, 2013. "Intézményi megoldások, fejlődési modellek
    [Institutional solutions, development models]
    ," MPRA Paper 50901, University Library of Munich, Germany.
  9. Bogedan, Claudia, 2006. "Readjusting the social democratic welfare state in Denmark 1973 - 2003," TranState Working Papers 40, University of Bremen, Collaborative Research Center 597: Transformations of the State.

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