Advanced Search
MyIDEAS: Login

Pareto-Improving Unemployment Policies

Contents:

Author Info

  • Jorg, LINGENS
  • Klaus, WAELDE

Abstract

We investigate how continental European unemployment can be reduced without reducing unemployment benefits and without reducing the net income of low-wage earners. Lower unemployment replacement rates reduce unemployment, the net wage and unemployment benefits. A lower tax on labour increases net wages and - for certain benefit-systems - unemployment benefits as well. Combining these two policies allows to reduce unemployment in countries with “net-Bismarck” and Beveridge systems without reducing net income of workers or the unemployed. Such a policy becomes self-financing under realistic parameter constellations when taxes are reduced only for low-income workers.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://sites.uclouvain.be/econ/DP/IRES/2005-33.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2005033.

as in new window
Length:
Date of creation: 01 Aug 2005
Date of revision:
Handle: RePEc:ctl:louvec:2005033

Contact details of provider:
Postal: Place Montesquieu 3, 1348 Louvain-la-Neuve (Belgium)
Fax: +32 10473945
Email:
Web page: http://www.uclouvain.be/econ
More information through EDIRC

Related research

Keywords: Inequality; Unemployment; Taxation; Policy reform;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

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.:
as in new window
  1. Eric Hanushek & Charles Ka Yui Leung & Kuzey Yilmaz, 2001. "Redistribution through Education and Other Transfer Mechanisms," NBER Working Papers 8588, National Bureau of Economic Research, Inc.
  2. Michalopoulos, Charles & Robins, Philip K. & Card, David, 2005. "When financial work incentives pay for themselves: evidence from a randomized social experiment for welfare recipients," Journal of Public Economics, Elsevier, vol. 89(1), pages 5-29, January.
  3. Schneider, Hilmar & Zimmermann, Klaus F. & Bonin, Holger & Brenke, Karl & Haisken-DeNew, John P. & Kempe, Wolfram, 2002. "Report No. 5: Beschäftigungspotenziale einer dualen Förderstrategie im Niedriglohnbereich," IZA Research Reports 5, Institute for the Study of Labor (IZA).
  4. Stephen Nickell, 2003. "Poverty and Worklessness in Britain," CEP Discussion Papers dp0579, Centre for Economic Performance, LSE.
  5. Jörg Lingens & Klaus Wälde, 2007. "Pareto-Improving Unemployment Policies," Working Papers 2007_34, Business School - Economics, University of Glasgow.
  6. Thorbecke, Erik & Charumilind, Chutatong, 2002. "Economic Inequality and Its Socioeconomic Impact," World Development, Elsevier, vol. 30(9), pages 1477-1495, September.
  7. Belot, M.V.K. & Ours, J.C. van, 2000. "Does the Recent Success of some OECD Countries in Lowering their Unemployment Rates lie in the Clever Design of their Labour Market Reforms?," Discussion Paper 2000-40, Tilburg University, Center for Economic Research.
  8. Koskela, Erkki & Vilmunen, Jouko, 1996. "Tax progression is good for employment in popular models of trade union behaviour," Labour Economics, Elsevier, vol. 3(1), pages 65-80, August.
  9. Kolm, Ann-Sofie, 1998. "Labour Taxation in a Unionised Economy with Home Production," Working Paper Series 1998:7, Uppsala University, Department of Economics.
  10. Kjell Erik Lommerud & Bjørn Sandvik & Odd Rune Straume, 2004. "Good Jobs, Bad Jobs and Redistribution," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(4), pages 703-720, December.
  11. Robert A. Moffitt, 2003. "The Negative Income Tax and the Evolution of U.S. Welfare Policy," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 119-140, Summer.
  12. Roed, Knut & Strom, Steinar, 2002. " Progressive Taxes and the Labour Market: Is the Trade-Off between Equality and Efficiency Inevitable?," Journal of Economic Surveys, Wiley Blackwell, vol. 16(1), pages 77-110, February.
  13. Christopher Pissarides, 1997. "The impact of employment tax cuts on unemployment and wages : the role of unemployment benefits and tax structure," LSE Research Online Documents on Economics 2332, London School of Economics and Political Science, LSE Library.
  14. Cahuc, Pierre & Lehmann, Etienne, 2000. "Should unemployment benefits decrease with the unemployment spell?," Journal of Public Economics, Elsevier, vol. 77(1), pages 135-153, July.
  15. Koeniger, Winfried & Leonardi, Marco & Nunziata, Luca, 2004. "Labour Market Institutions and Wage Inequality," IZA Discussion Papers 1291, Institute for the Study of Labor (IZA).
  16. Emmanuel Saez, 2002. "Optimal Income Transfer Programs: Intensive Versus Extensive Labor Supply Responses," The Quarterly Journal of Economics, MIT Press, vol. 117(3), pages 1039-1073, August.
  17. Atkinson, Anthony B, 2000. " The Welfare State, Budgetary Pressure and Labour Market Shifts," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(3), pages 445-62, June.
  18. Pierre Cahuc & André Zylberberg, 2004. "Labor Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 026203316x, December.
  19. Bruno Van der Linden, 2004. "Active citizen's income, unconditional income and participation under imperfect competition: a welfare analysis," Oxford Economic Papers, Oxford University Press, vol. 56(1), pages 98-117, January.
  20. Phelps, Edmund S, 1994. "Low-Wage Employment Subsidies versus the Welfare State," American Economic Review, American Economic Association, vol. 84(2), pages 54-58, May.
  21. Gruner, Hans Peter, 2002. " Unemployment and Labor-Market Reform: A Contract Theoretic Approach," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 641-56, December.
  22. Henrik Jacobsen Kleven & Peter Birch S¯rensen, 2004. "Labour Tax Reform, the Good Jobs and the Bad Jobs," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(1), pages 45-64, 03.
  23. Ljungqvist, Lars & Sargent, Thomas J, 2002. "The European Employment Experience," CEPR Discussion Papers 3543, C.E.P.R. Discussion Papers.
  24. Lawrence M. Kahn, 2000. "Wage Inequality, Collective Bargaining, And Relative Employment From 1985 To 1994: Evidence From Fifteen Oecd Countries," The Review of Economics and Statistics, MIT Press, vol. 82(4), pages 564-579, November.
  25. P. B. Sørensen, 1997. "Public finance solutions to the European unemployment problem?," Economic Policy, CEPR & CES & MSH, vol. 12(25), pages 221-264, October.
  26. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages C1-33, March.
  27. Stephen Nickell & Luca Nunziata & Wolfgang Ochel, 2005. "Unemployment in the OECD Since the 1960s. What Do We Know?," Economic Journal, Royal Economic Society, vol. 115(500), pages 1-27, 01.
  28. Johnson, Paul & Webb, Steven, 1993. "Explaining the Growth in UK Income Inequality: 1979-1988," Economic Journal, Royal Economic Society, vol. 103(417), pages 429-35, March.
  29. Schnabel, Claus, 2002. "Determinants of trade union membership," Discussion Papers 15, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
  30. Schnabel, Claus & Wagner, Joachim, 2003. "Determinants of Trade Union Membership in Western Germany: Evidence from Micro Data, 1980-2000," IZA Discussion Papers 708, Institute for the Study of Labor (IZA).
  31. Leo Kaas & Leopold Thadden, 2004. "Budgetary policy and unemployment dynamics in an olg model with collective bargaining," Economic Journal, Royal Economic Society, vol. 114(498), pages 867-889, October.
  32. Tom Clark & Andrew Leicester, 2004. "Inequality and two decades of British tax and benefit reform," Fiscal Studies, Institute for Fiscal Studies, vol. 25(2), pages 129-158, June.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Laszlo Goerke & Markus Pannenberg & Heinrich Ursprung, 2010. "A positive theory of the earnings relationship of unemployment benefits," Public Choice, Springer, vol. 145(1), pages 137-163, October.
  2. Potrafke, Niklas, 2010. "Labor market deregulation and globalization: Empirical evidence from OECD countries," Munich Reprints in Economics 19282, University of Munich, Department of Economics.
  3. Jorg, LINGENS & Klaus, WAELDE, 2005. "Pareto-Improving Unemployment Policies," Discussion Papers (ECON - Département des Sciences Economiques) 2005033, Université catholique de Louvain, Département des Sciences Economiques.
  4. Fernando Sanchez Losada & Daniel Cardona, 2005. "The Unemployment Benefit System: a Redistributive or an Insurance Institution?," Working Papers in Economics 129, Universitat de Barcelona. Espai de Recerca en Economia.
  5. Erkki Koskela & Panu Poutvaara, 2008. "Outsourcing and Labor Taxation in Dual Labor Markets," CESifo Working Paper Series 2333, CESifo Group Munich.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ctl:louvec:2005033. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anne DAVISTER-LOGIST).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.