Staying on the Dole
AbstractWe 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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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5967.
Date of creation: Nov 2006
Date of revision:
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Other versions of this item:
- Strulik, Holger & Tyran, Jean-Robert & Vanini, Paolo, 2007. "Staying on the Dole," Diskussionspapiere der Wirtschaftswissenschaftlichen FakultÃ¤t der Leibniz UniversitÃ¤t Hannover dp-377, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
- Holger Strulik & Jean-Robert Tyran & Paolo Vanini, 2006. "Staying on the Dole," Discussion Papers 06-18, University of Copenhagen. Department of Economics.
- 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, Vacancies, and Immigrant Workers - - - 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)
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