Is it wise to have unemploment accounts in high unemployment and long un employment duration economies?
AbstractIn previous work, Pallage and Zimmermann (2010) document how an Unemployment Account system dominates an Unemployment Insurance system in many circumstances for a labor market like in the US if it is optimized. This paper reevaluates this in the context of a labor market with higher average unemployment rates and durations, using a heterogeneous DSGE model with borrowing constraints. Using the example of Austria, we establish the optimal characteristics of the Unemployment Account system and compare it to unemployment insurance and to the newly established system of accounts for severance pay.
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Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2011 Meeting Papers with number 153.
Date of creation: 2011
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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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