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Optimal unemployment insurance design: time limits, monitoring, or workfare? Author info | Abstract | Publisher info | Download info | Related research | Statistics Fredriksson, Peter () (IFAU - Institute for Labour Market Policy Evaluation)
Holmlund, Bertil () (Uppsala University)
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This paper analyses crucial design features of unemployment insurance (UI) policies. We examine three different means of improving the efficiency of UI: the duration of benefit payments, monitoring in conjunction with sanctions, and workfare. To that end we develop a quantitative model of equilibrium unemployment. The model features worker heterogeneity in preferences for leisure. The numerical analysis suggests that a system with monitoring and sanctions restores search incentives most effectively, since it brings additional incentives to search actively so as to avoid the sanction. Therefore, the UI provider can offer a more generous UI replacement rate in a system with monitoring and sanctions than in the other two systems. Workfare appears to be inferior to the other two systems.
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Paper provided by IFAU - Institute for Labour Market Policy Evaluation in its series Working Paper Series with number
2005:13.
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Length: 33 pages
Date of creation: 12 May 2005Date of revision:
Publication status: Published in International Tax and Public Finance, 2006, pages 565-585.Handle: RePEc:hhs:ifauwp:2005_013Contact details of provider: Postal: Labour Market Policy Evaluation, P O Box 513, SE-751 20 Uppsala, Sweden Phone: (+46) 18 - 471 70 70 Fax: (+46) 18 - 471 70 71 Email: Web page: http://www.ifau.se/ More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Margareta Wicklander).
Keywords: Unemployment insurance search equilibrium time limits monitoring and sanctions workfare Other versions of this item:
Article Paper Fredriksson, Peter & Holmlund, Bertil, 2003.
"Optimal Unemployment Insurance Design:Time Limits, Monitoring, or Workfare? ,"
Working Paper Series
2003:17, Uppsala University, Department of Economics.
[Downloadable!] Peter Fredriksson & Bertil Holmlund, 2003.
"Optimal Unemployment Insurance Design: Time Limits, Monitoring, or Workfare? ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo GmbH.
[Downloadable!] Find related papers by JEL classification: J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy
This paper has been announced in the following NEP Reports :
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.: Boone, Jan & Fredriksson, Peter & Holmlund, Bertil & van Ours, Jan, 2002.
"Optimal unemployment insurance with monitoring and sanctions ,"
Working Paper Series
2002:21, IFAU - Institute for Labour Market Policy Evaluation.
[Downloadable!]
Other versions:
Boone, Jan & Fredriksson, Peter & Holmlund, Bertil & van Ours, Jan, 2001.
"Optimal Unemployment Insurance with Monitoring and Sanctions ,"
Working Paper Series
2001:20, Uppsala University, Department of Economics.
[Downloadable!] Boone, J. & Fredriksson, P. & Holmlund, B. & Ours, J.C. van, 2001.
"Optimal unemployment insurance with monitoring and sanctions ,"
Discussion Paper
85, Tilburg University, Center for Economic Research.
[Downloadable!] Boone, Jan & Fredriksson, Peter & Holmlund, Bertil & van Ours, Jan, 2001.
"Optimal Unemployment Insurance with Monitoring and Sanctions ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo GmbH.
[Downloadable!] Boone, Jan & Fredriksson, Peter & Holmlund, Bertil & van Ours, Jan C., 2001.
"Optimal Unemployment Insurance with Monitoring and Sanctions ,"
IZA Discussion Papers
401, Institute for the Study of Labor (IZA).
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CEPR Discussion Papers
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"Optimal Workfare with Voluntary and Involuntary Unemployment ,"
EPRU Working Paper Series
03-15, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics, revised Aug 2004.
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Other versions: Lalive, Rafael & van Ours, Jan C. & Zweimüller, Josef, 2002.
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Lalive, R. & Ours, J.C. van & Zweimuller, J., 2002.
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CEPR Discussion Papers
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"The Effect of Benefit Sanctions on the Duration of Unemployment ,"
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"The Effect Of Benefit Sanctions On The Duration Of Unemployment ,"
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"Should UI Benefits Really Fall Over Time? ,"
IZA Discussion Papers
622, Institute for the Study of Labor (IZA).
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Other versions: Fredriksson, Peter & Holmlund, Bertil, 2003.
"Improving Incentives in Unemployment Insurance: A Review of Recent Research ,"
Working Paper Series
2003:10, Uppsala University, Department of Economics.
[Downloadable!]
Other versions:
Fredriksson, Peter & Holmlund, Bertil, 2003.
"Improving incentives in unemployment insurance: A review of recent research ,"
Working Paper Series
2003:5, IFAU - Institute for Labour Market Policy Evaluation.
[Downloadable!] Peter Fredriksson & Bertil Holmlund, 2003.
"Improving Incentives in Unemployment Insurance: A Review of Recent Research ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo GmbH.
[Downloadable!] Peter Fredriksson & Bertil Holmlund, 2006.
"Improving Incentives in Unemployment Insurance: A Review of Recent Research ,"
Journal of Economic Surveys ,
Blackwell Publishing, vol. 20(3), pages 357-386, 07.
[Downloadable!] (restricted) Jaap H. Abbring & Gerard J. Berg & Jan C. Ours, 2005.
"The Effect of Unemployment Insurance Sanctions on the Transition Rate from Unemployment to Employment ,"
Economic Journal ,
Royal Economic Society, vol. 115(505), pages 602-630, 07.
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Other versions: Gerard van den Berg & Bas van der Klaauw, 2000.
"Counseling and Monitoring of Unemployed Workers: Theory and Evidence from a Social Experiment ,"
Econometric Society World Congress 2000 Contributed Papers
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"Optimal unemployment insurance ,"
Journal of Public Economics ,
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Other versions: Olivier Jean Blanchard & Peter Diamond, 1990.
"The Beveridge Curve ,"
NBER Reprints
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Other versions: Fredriksson, Peter & Holmlund, Bertil, 2001.
"Optimal Unemployment Insurance in Search Equilibrium ,"
Journal of Labor Economics ,
University of Chicago Press, vol. 19(2), pages 370-99, April.
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Other versions:
Fredriksson, Peter & Holmlund, Bertil, 1998.
"Optimal Unemployment Insurance in Search Equilibrium ,"
Working Paper Series
1998:2, Uppsala University, Department of Economics.
[Downloadable!] Fredriksson, P. & Holmlund, B., 1998.
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1998-2, Uppsala - Working Paper Series.
Hosios, Arthur J, 1990.
"On the Efficiency of Matching and Related Models of Search and Unemployment ,"
Review of Economic Studies ,
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Besley, T. & Coate, S., 1991.
"The Design Of Income Maintenance Programs ,"
Papers
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Other versions: Dan A. Black & Jeffrey A. Smith & Mark C. Berger & Brett J. Noel, 2003.
"Is the Threat of Reemployment Services More Effective than the Services Themselves? Evidence from Random Assignment in the UI System ,"
American Economic Review ,
American Economic Association, vol. 93(4), pages 1313-1327, September.
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"The Optimal Payment of Unemployment Insurance Benefits over Time ,"
Journal of Political Economy ,
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Other versions: Hopenhayn, Hugo A & Nicolini, Juan Pablo, 1997.
"Optimal Unemployment Insurance ,"
Journal of Political Economy ,
University of Chicago Press, vol. 105(2), pages 412-38, April.
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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.)
Cockx, Bart & Ries, Jean, 2004.
"The Exhaustion of Unemployment Benefits in Belgium: Does it Enhance the Probability of Employment? ,"
IZA Discussion Papers
1177, Institute for the Study of Labor (IZA).
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Bart Cockx & Jean Ries, 2004.
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[Downloadable!] Bart, COCKX & Jean, RIES, 2004.
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Fredriksson, Peter & Holmlund, Bertil, 2003.
"Improving Incentives in Unemployment Insurance: A Review of Recent Research ,"
Working Paper Series
2003:10, Uppsala University, Department of Economics.
[Downloadable!]
Other versions:
Fredriksson, Peter & Holmlund, Bertil, 2003.
"Improving incentives in unemployment insurance: A review of recent research ,"
Working Paper Series
2003:5, IFAU - Institute for Labour Market Policy Evaluation.
[Downloadable!] Peter Fredriksson & Bertil Holmlund, 2003.
"Improving Incentives in Unemployment Insurance: A Review of Recent Research ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo GmbH.
[Downloadable!] Peter Fredriksson & Bertil Holmlund, 2006.
"Improving Incentives in Unemployment Insurance: A Review of Recent Research ,"
Journal of Economic Surveys ,
Blackwell Publishing, vol. 20(3), pages 357-386, 07.
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Koch, Susanne & Stephan, Gesine & Walwei, Ulrich, 2005.
"Workfare: Möglichkeiten und Grenzen ,"
IAB Discussion Paper
200517, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
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Christian Holzner & Volker Meier & Martin Werding, 2006.
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Blomquist, Sören & Christiansen, Vidar, 2004.
"Taxation and Heterogeneous Preferences ,"
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