Unemployment Benefits and Unemployment Rates of Low-Skilled and Old Workers in West Germany: A Search Equilibrium Approach
AbstractIn this paper we ask a question whether a prolonging of entitlement to unemployment benefits that happened in the mid 80s can explain the unusual increase in unemployment rates of unskilled and old workers. To answer this question we estimate a version of Burdett-Mortensen model of search equilibrium and analyze how reservation wages and search intensities responded to benefit reforms. We try both nonparametric and fully-parametric estimation methods and discover the cases in which the first one can not be applicable. We find that the entitlement reforms are in big part responsible for the increase of unemployment among unskilled workers
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Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2004 Meeting Papers with number 395.
Date of creation: 2004
Date of revision:
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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
Web page: http://www.EconomicDynamics.org/society.htm
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search equilibrium; unempoyment benefits; parametric estimation;
Find related papers by JEL classification:
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-08-02 (All new papers)
- NEP-DGE-2004-08-02 (Dynamic General Equilibrium)
- NEP-LAB-2004-08-02 (Labour Economics)
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