Heterogeneous Labor Markets and the Generosity Towards the Unemployed: An International Perspective

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Heterogeneous Labor Markets and the Generosity Towards the Unemployed: An International Perspective

Author Info

Stephane Pallage () (Center for Research on Economic Fluctuations and Employment, UQAM)
Christian Zimmermann () (Center for Research on Economic Fluctuations and Employment, UQAM)

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Abstract

In this paper, we investigate whether the different distributions of European, Canadian and US labor forces may explain their differences in unemployment insurance generosity and attitude towards moral hazard. We do so within a dynamic general equilibrium model with indivisible labor and borrowing constraints. Agents differ in their educational attainment, which translates into country-specific differences in the probabilities of finding a job as well as income prospects. We parametrize the model to a set of European countries, Canada and the United States. We then ask citizens to vote on an unemployment insurance program given a certain level of moral hazard.

Les différences dans la distribution des forces de travail en Europe, au Canada et aux USA peuvent-elles expliquer les différences de générosité de l'assurance chômage et d'attitudes vis-à-vis du risque moral? Nous répondons à cette question dans un modèle d'équilibre général dynamique avec indivisibilité du travail et contraintes de liquidités. Les agents diffèrent selon leur niveau d'éducation, ce qui se traduit par des différences dans la probabilité d'emploi et dans le salaire espéré. Nous paramétrisons le modèle pour un ensemble de pays européens, le Canada et les Etats Unis, et demandons aux citoyens de ces pays de se prononcer sur la générosité de l'assurance chômage par vote.

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Publisher Info
Paper provided by CREFE, Université du Québec à Montréal in its series Cahiers de recherche CREFE / CREFE Working Papers with number 88.

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Length: 17 pages
Date of creation: Jun 1999
Date of revision:
Handle: RePEc:cre:crefwp:88

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Find related papers by JEL classification:
E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
D7 - Microeconomics - - Analysis of Collective Decision-Making
D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Stephane Pallage & Christian Zimmermann, 2004. "On Voters' Attitudes Towards Unemployment Insurance Subsidies across Regions: A Canadian Simulation," Working papers 2004-34, University of Connecticut, Department of Economics. [Downloadable!]
Other versions:
- St'phane Pallage & Christian Zimmermann, 2006. "On voters' attitudes towards unemployment insurance subsidies across regions: a Canadian simulation," Journal of Population Economics, Springer, vol. 19(2), pages 391-410, June. [Downloadable!] (restricted)
John Hassler & José V. Rodríguez Mora & Kjetil Storesletten & Fabrizio Zilibotti, 1998. "Equilibrium Unemployment Insurance," Economics Working Papers 605, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 1999. [Downloadable!]
Other versions:
- Hassler, J. & Mora, J.V.R. & Storesletten, K. & Zilibotti, F., 1999. "Equilibrium Unemployment Insurance," Papers 665, Stockholm - International Economic Studies.
- Hassler, John & Mora, José & Storesletten, Kjetil & Zilibotti, Fabrizio, 1999. "Equilibrium Unemployment Insurance," Seminar Papers 665, Stockholm University, Institute for International Economic Studies. [Downloadable!]
- Hassler, John & Rodríguez Mora, José Vicente & Storesletten, Kjetil & Zilibotti, Fabrizio, 1999. "Equilibrium Unemployment Insurance," CEPR Discussion Papers 2126, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)

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