On Voters' Attitudes Towards Unemployment Insurance Subsidies across Regions: A Canadian Simulation
AbstractThe Canadian unemployment insurance program is designed to reflect the varying risk of joblessness across regions. Regions that are considered low-risk areas subsidize higher risk ones. A region's risk is typically proxied by its relative unemployment rate. We use a dynamic, heterogeneous-agent model calibrated to Canada to analyze voters preferences between a uniformly generous unemployment insurance and the current system with asymmetric generosity. We find that Canada's unusual unemployment insurance system is surprisingly close to what voters would choose in spite of the possibilities of moral hazard and self-insurance through asset build-up.
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Bibliographic InfoPaper provided by University of Connecticut, Department of Economics in its series Working papers with number 2004-34.
Length: 27 pages
Date of creation: Oct 2004
Date of revision:
Note: This paper was presented at the 2003 meeting of the European Society for Population Economics at NYU, the 2003 Montreal Macro Workshop, the 2003 meeting of the Society for Economic Dynamics in Paris, and the Midwest Macro Conference at Iowa State University. We gratefully acknowledge financial support from FCAR/FQRSC.
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Unemployment insurance; moral hazard; shirking; heterogeneous agents; voting; redistribution.;
Other versions of this item:
- Stéphane Pallage & Christian Zimmermann, 2006. "On voters’ attitudes towards unemployment insurance subsidies across regions: a Canadian simulation," Journal of Population Economics, Springer, vol. 19(2), pages 391-410, June.
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- 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-CDM-2004-11-07 (Collective Decision-Making)
- NEP-CMP-2004-11-07 (Computational Economics)
- NEP-DGE-2004-11-07 (Dynamic General Equilibrium)
- NEP-IAS-2004-11-07 (Insurance Economics)
- NEP-POL-2004-11-07 (Positive Political Economics)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Optimal Unemployment Insurance over the Business Cycle
by Christian Zimmermann in NEP-DGE blog on 2010-12-17 11:01:01
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