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The Simple Economics of Benefit Transfers

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  • Dennis J. Snower

Abstract

The paper examines the employment and unemployment implications of permitting unemployed people to use part of their unemployment benefits to provide employment vouchers to the firms that hire them. This opportunity to transfer unemployment benefits into employment subsidies--“benefit transfers” for short--would help replace the unemployment trap by an incentive to work. The vouchers rise with people’s unemployment durations and with the amount of training provided. The policy would be costless to the government since the cost of the employment vouchers is set equal to the amount saved on unemployment benefits. It would not be inflationary since the long-term unemployed, on whom the vouchers are targeted, have little influence on wage setting.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 95/5.

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Length: 42
Date of creation: 01 Jan 1995
Date of revision:
Handle: RePEc:imf:imfwpa:95/5

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Cited by:
  1. Berthold, Norbert & Fehn, Rainer & Thode, Eric, 1999. "Rigide Arbeitsmärkte und ungleiche Einkommensverteilung: ein unlösbares Dilemma?," Wirtschaftswissenschaftliche Beiträge 31, Julius-Maximilians-Universität Würzburg, Lehrstuhl für Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik.
  2. Vodopivec, Milan, 1995. "Unemployment insurance and duration of unemployment : evidence from Slovenia's transition," Policy Research Working Paper Series 1552, The World Bank.
  3. Martin Petrick & Ingo Pies, 2007. "In search for rules that secure gains from cooperation: the heuristic value of social dilemmas for normative institutional economics," European Journal of Law and Economics, Springer, Springer, vol. 23(3), pages 251-271, June.
  4. Annamaria Simonazzi & Paola Villa, 1999. "Flexibility and Growth," International Review of Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 13(3), pages 281-311.
  5. Berthold, Norbert & von Berchem, Sascha, 2003. "Die Sozialhilfe zwischen Effizienz und Gerechtigkeit: wie kann der Spagat gelingen?," Wirtschaftswissenschaftliche Beiträge 62, Julius-Maximilians-Universität Würzburg, Lehrstuhl für Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik.
  6. Fehn, Rainer, 2002. "Arbeitsmarktflexibilisierung und Arbeitslosigkeit," Wirtschaftswissenschaftliche Beiträge 54, Julius-Maximilians-Universität Würzburg, Lehrstuhl für Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik.
  7. Melanie Arntz & Stefan Boeters & Nicole Gürtzgen & Stefanie Schubert, 2006. "Analysing Welfare Reform in a Microsimulation-AGE Model," Computing in Economics and Finance 2006, Society for Computational Economics 109, Society for Computational Economics.
  8. Arntz, Melanie & Boeters, Stefan & Gürtzgen, Nicole & Schubert, Stefanie, 2006. "Analysing welfare reform in a microsimulation-AGE model: the value of disaggregation," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 06-76, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  9. Vodopivec, Milan & Raju, Dhushyanth, 2002. "Income support systems for the unemployed : issues and options," Social Protection Discussion Papers 25529, The World Bank.
  10. Berthold, Norbert, 1998. "Die zehn Gebote der Arbeitsmarktpolitik," Wirtschaftswissenschaftliche Beiträge 21, Julius-Maximilians-Universität Würzburg, Lehrstuhl für Volkswirtschaftslehre, insbes. Wirtschaftsordnung und Sozialpolitik.
  11. Steffen J. Roth, 2003. "Arbeitsmarktinstrumente und gesellschaftliche Normen - Das Mainzer-Modell untergräbt gesellschaftliche Normen und verschärft damit die Probleme, die es zu überwinden glaubt," Otto-Wolff-Institut Discussion Paper Series, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland 01/2003, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland.
  12. Karl Whelan, 1997. "Unemployment and the durational structure of exit rates," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 1997-54, Board of Governors of the Federal Reserve System (U.S.).

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