The Displacement Effect of Reemployment Bonus Programs
AbstractThe authors develop a partial equilibrium matching model of the labor market in order to examine whether adoption of a reemployment bonus would displace workers not offered the bonus. They examine the displacement effect for (1) unemployment-insurance-eligible workers who are offered but do not find a job in time to qualify for a bonus and (2) unemployment-insurance-ineligible workers who are never offered a bonus. The model predicts minimal displacement of the former group. But for the latter group, the model predicts an increase in unemployment duration of 0.2-0.4 week and an increase in unemployment of up to two per thousand. Copyright 1993 by University of Chicago Press.
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Bibliographic InfoPaper provided by W.E. Upjohn Institute for Employment Research in its series Upjohn Working Papers and Journal Articles with number 90-02.
Date of creation: Feb 1990
Date of revision:
earnings; unemployment; insurance; reemployment; bonus; Woodbury; Davidson;
Other versions of this item:
- Davidson, Carl & Woodbury, Stephen A, 1993. "The Displacement Effect of Reemployment Bonus Programs," Journal of Labor Economics, University of Chicago Press, vol. 11(4), pages 575-605, October.
- Carl Davidson & Stephen A. Woodbury, . "The Displacement Effect of Reemployment Bonus Programs," Upjohn Working Papers and Journal Articles cdsaw1993, W.E. Upjohn Institute for Employment Research.
- J0 - Labor and Demographic Economics - - General
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies
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