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Measuring the Equilibrium Effects of Unemployment Benefits Dispersion

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  • Aico van Vuuren

    (Vrije Universiteit Amsterdam)

  • Gerard J. van den Berg

    ()
    (Vrije Universiteit Amsterdam)

  • Geert Ridder

    (Johns Hopkins University)

Abstract

We analyze the impact of unemployment benefits and minimum wagesusing an equilibrium search model which allows for dispersion ofbenefits and productivity levels, job-to-job transitions, andstructural and frictional unemployment. The estimation method usesreadily available aggregate data on marginal distributions ofunemployment durations as well as wages and benefit levels.Different causes of structural and frictional unemployment areinvestigated. We investigate the efficiency of the imposition of asingle benefit level for all household types and the introductionof an Earned Income Tax Credit.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 99-086/3.

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Date of creation: 05 Nov 1999
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Handle: RePEc:dgr:uvatin:19990086

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  1. van den Berg, Gerard J, 1990. "Nonstationarity in Job Search Theory," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 57(2), pages 255-77, April.
  2. Koning, Pierre & Ridder, Geert & van den Berg, Gerard J, 1995. "Structural and Frictional Unemployment in an Equilibrium Search Model with Heterogeneous Agents," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 10(S), pages S133-51, Suppl. De.
  3. Mortensen, Dale T. & Pissarides, Christopher A., 1999. "New developments in models of search in the labor market," Handbook of Labor Economics, Elsevier, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 39, pages 2567-2627 Elsevier.
  4. van den Berg, Gerard J, 1992. "A Structural Dynamic Analysis of Job Turnover and the Costs Associated with Moving to Another Job," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 102(414), pages 1116-33, September.
  5. Füsun Gönül, 1992. "New Evidence on Whether Unemployment and out of the Labor Force are Distinct States," Journal of Human Resources, University of Wisconsin Press, vol. 27(2), pages 329-361.
  6. Flinn, Christopher J & Heckman, James J, 1983. "Are Unemployment and Out of the Labor Force Behaviorally Distinct Labor Force States?," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 1(1), pages 28-42, January.
  7. Bontemps, Christian & Robin, Jean-Marc & Van den Berg, Gerard J, 1999. "An Empirical Equilibrium Job Search Model with Search on the Job and Heterogeneous Workers and Firms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(4), pages 1039-74, November.
  8. Dale Mortensen, 1984. "Job Search and Labor Market Analysis," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 594, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  9. Berg, G.J. & Ridder, G., 1993. "An empirical equilibrium search model of the labour market," Serie Research Memoranda, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics 0039, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  10. Bontemps, Christian & Robin, Jean-Marc & van den Berg, Gerard J, 2000. "Equilibrium Search with Continuous Productivity Dispersion: Theory and Nonparametric Estimation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(2), pages 305-58, May.
  11. Stephen R. G. Jones & W. Craig Riddell, 1999. "The Measurement of Unemployment: An Empirical Approach," Econometrica, Econometric Society, Econometric Society, vol. 67(1), pages 147-162, January.
  12. Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, Elsevier, vol. 3(2), pages 156-168, June.
  13. Hopenhayn, Hugo A & Nicolini, Juan Pablo, 1997. "Optimal Unemployment Insurance," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 105(2), pages 412-38, April.
  14. Albrecht, James W & Axell, Bo, 1983. "An Equilibrium Model of Search Unemployment," Working Paper Series, Research Institute of Industrial Economics 99, Research Institute of Industrial Economics.
  15. Dolton, Peter & O'Neill, Donal, 1996. "Unemployment Duration and the Restart Effect: Some Experimental Evidence," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 106(435), pages 387-400, March.
  16. Scholz, John Karl, 1996. "In-Work Benefits in the United States: The Earned Income Tax Credit," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 106(434), pages 156-69, January.
  17. Burdett, Kenneth & Mortensen, Dale T, 1998. "Wage Differentials, Employer Size, and Unemployment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 257-73, May.
  18. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780199279173, October.
  19. Dale T. Mortensen, 1988. "Equilibrium Wage Distrihutions: A Synthesis," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 811, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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Cited by:
  1. Alok Kumar, 2004. "Inflation and the Dispersion of Real Wages," Econometric Society 2004 Far Eastern Meetings, Econometric Society 750, Econometric Society.
  2. Belan, Pascal & Carré, Martine & Gregoir, Stéphane, 2010. "Subsidizing low-skilled jobs in a dual labor market," Labour Economics, Elsevier, Elsevier, vol. 17(5), pages 776-788, October.
  3. Alok Kumar, 2008. "Capital Tax, Minimum Wage, and Labor Market Outcomes," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(1), pages 133-154, January.

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