Staying on the Dole

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Staying on the Dole

Author Info

Holger Strulik (University of Hannover)
Jean-Robert Tyran (Department of Economics, University of Copenhagen)
Paolo Vanini (University of Zurich)

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Abstract

We develop a simple model of short- and long-term unemployment to study how labor market institutions interact with labor market conditions and personal characteristics of the unemployed. We analyze how the decision to exit unemployment and to mitigate human capital degradation by retraining depends on education, skill degradation, age, labor market tightness, taxes, unemployment insurance benefits and welfare assistance. We extend our analysis by allowing for time-inconsistent choices and demonstrate the possibility of an unemployment trap.

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Publisher Info
Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number 06-18.

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Length: 22 pages
Date of creation: Oct 2006
Date of revision:
Handle: RePEc:kud:kuiedp:0618

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Paper
- Strulik, Holger & Tyran, Jean-Robert & Vanini, Paolo, 2006. "Staying on the Dole," CEPR Discussion Papers 5967, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Strulik, Holger & Tyran, Jean-Robert & Vanini, Paolo, 2007. "Staying on the Dole," Diskussionspapiere der Wirtschaftswissenschaftlichen FakultÃ¤t der UniversitÃ¤t Hannover dp-377, Universität Hannover, Wirtschaftswissenschaftliche Fakultät. [Downloadable!]

Find related papers by JEL classification:
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

This paper has been announced in the following NEP Reports:

NEP-ALL-2006-11-12 (All new papers)
NEP-DGE-2006-11-12 (Dynamic General Equilibrium)
NEP-HRM-2006-11-12 (Human Capital & Human Resource Management)
NEP-IAS-2006-11-12 (Insurance Economics)
NEP-LAB-2006-11-12 (Labour Economics)

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.:

Lindbeck, A & Nyberg, S & Weibull, J-W, 1997. "Social Norms and Economic Incentives in the Welfare State," Research Institute of Industrial Economics Working Papers 476, Research Institute of Industrial Economics (IFN).
Other versions:
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Other versions:
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Other versions:
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Other versions:
- Lars Ljungqvist & Thomas J. Sargent, 1995. "The European unemployment dilemma," Working Paper Series, Macroeconomic Issues 95-17, Federal Reserve Bank of Chicago.
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Michèle Belot & Jan C. van Ours, 2004. "Does the recent success of some OECD countries in lowering their unemployment rates lie in the clever design of their labor market reforms?," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 621-642, October. [Downloadable!] (restricted)
Other versions:
- 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 40, Tilburg University, Center for Economic Research. [Downloadable!]
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