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Unemployment Insurance Savings Accounts and Collective Wage Determination

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  • Goerke, Laszlo

    ()
    (IAAEU, University of Trier)

Abstract

Unemployment Insurance Savings Accounts (UISAs) entitle workers to unemployment benefits at the expense of future pension payments. Therefore, such accounts make unemployment less attractive, intensify job search, and raise employment. In the present paper the wage and employment consequences of UISAs are investigated in a model of collective wage determination. In the basic set-up, UISAs induce a trade union to lower wages. This effect can also arise if (1) balanced-budget repercussions are taken into account, (2) individual job search is incorporated, and (3) wage-dependent pensions are allowed for. However, the requirements for negative wage effects to arise become stricter than in the base model. Thus, collective bargaining creates additional impediments for the positive employment consequences of UISAs.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3141.

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Length: 33 pages
Date of creation: Nov 2007
Date of revision:
Publication status: published as: The Effects of Unemployment Insurance Savings Accounts in the Presence of Collective Bargaining Contracts, pp. 199-226, in: Arbeitsverträge – Wirtschaftswissenschaftliches Seminar Ottobeuren, Vol. 37, Eds.: W. Franz, H.-J. Ramser, M. Stadler, Mohr Siebeck: Tübingen, 2008
Handle: RePEc:iza:izadps:dp3141

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Related research

Keywords: unemployment benefits; employment; trade union; unemployment accounts; wages;

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References

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  1. Calmfors, L. & Forslund, A., 1989. "Wage Setting In Sweden," Papers 430, Stockholm - International Economic Studies.
  2. Folster, Stefan, 1999. "Social Insurance Based on Personal Savings," The Economic Record, The Economic Society of Australia, vol. 75(228), pages 5-18, March.
  3. Kugler, Adriana D., 2005. "Wage-shifting effects of severance payments savings accounts in Colombia," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 487-500, February.
  4. Ferrer, Ana M. & Riddell, W. Craig, 2009. "Unemployment insurance savings accounts in Latin America : overview and assessment," Social Protection Discussion Papers 49173, The World Bank.
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  8. Folster, Stefan, 1997. "Social Insurance Based on Personal Savings Accounts: A Possible Reform Strategy for Overburdened Welfare States," Kyklos, Wiley Blackwell, vol. 50(2), pages 253-58.
  9. Louis Kaplow, 2003. "The Value of a Statistical Life and the Coefficient of Relative Risk Aversion," NBER Working Papers 9852, National Bureau of Economic Research, Inc.
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  13. Orszag, Mike & Snower, Dennis J., 2002. "From Unemployment Benefits to Unemployment Accounts," IZA Discussion Papers 532, Institute for the Study of Labor (IZA).
  14. Feldstein, Martin & Altman, Dan, 2007. "Unemployment Insurance Savings Accounts," Scholarly Articles 2960185, Harvard University Department of Economics.
  15. Orszag, Mike & Snower, Dennis J., 1997. "Expanding the Welfare System: A Proposal for Reform," CEPR Discussion Papers 1674, C.E.P.R. Discussion Papers.
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Cited by:
  1. Alessio J. G. Brown & J. Michael Orszag & Dennis J. Snower, 2006. "Unemployment Accounts and Employment Incentives," Kiel Working Papers 1274, Kiel Institute for the World Economy.

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