Staying on the Dole

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Staying on the Dole

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Strulik, Holger
Tyran, Jean-Robert
Vanini, Paolo

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Abstract

We develop a simple model of short- and long-term unemployment to study how labour market institutions interact with labour market conditions and personal characteristics of the unemployed. We analyze how the decision to exit unemployment and to mitigate human capital degradation by retraining depends on education, skill degradation, age, labour market tightness, taxes, unemployment insurance benefits and welfare assistance. We extend our analysis by allowing for time-inconsistent choices and demonstrate the possibility of an unemployment trap.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5967.

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Date of creation: Nov 2006
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Handle: RePEc:cpr:ceprdp:5967

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Paper
- Holger Strulik & Jean-Robert Tyran & Paolo Vanini, 2006. "Staying on the Dole," Discussion Papers 06-18, University of Copenhagen. Department of Economics. [Downloadable!]
- Strulik, Holger & Tyran, Jean-Robert & Vanini, Paolo, 2007. "Staying on the Dole," Diskussionspapiere der Wirtschaftswissenschaftlichen FakultÃ¤t der UniversitÃ¤t Hannover dp-377, Universität Hannover, Wirtschaftswissenschaftliche Fakultät. [Downloadable!]

Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search

This paper has been announced in the following NEP Reports:

NEP-ALL-2006-12-09 (All new papers)
NEP-HRM-2006-12-09 (Human Capital & Human Resource Management)
NEP-IAS-2006-12-09 (Insurance Economics)
NEP-LAB-2006-12-09 (Labour Economics)

References listed on IDEAS
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Other versions:
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Other versions:
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Other versions:
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