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Redistribution and employment policies with endogenous unemployment

  • Boadway, Robin
  • Cuff, Katherine
  • Marceau, Nicolas

We study the features of optimal transfers to the non-employed which include those unable to work, the voluntarily unemployed, and the involuntarily unemployed. Both voluntary and involuntary unemployment are endogenous. We analyze optimal government policies in the presence of two types of involuntary unemployment, frictional and that induced by efficiency wages. We consider how the quality of the government's information affects policies and also study time-consistent policies. The models are simple, yet rich enough to reflect real-world policies, including transfers to the disabled, welfare for non-working employables, unemployment insurance, employment subsidies, and taxes on workers and firms. Nous étudions les transferts aux sans-emploi, lesquels peuvent être incapables de travailler, chômeurs volontaires ou chômeurs involontaires. Le nombre de chômeurs volontaires et involontaires est endogène. Nous caractérisons les politiques gouvernementales optimales pour le cas où le chômage involontaire est frictionnel et pour celui où il est causé par des salaires efficaces. Nous étudions la cohérence temporelle des politiques et l'impact qu'a sur elles la qualité de l'information à la disposition du gouvernement. Comportant des transferts aux non-employables, de l'aide sociale aux sans-emplois capables de travailler, de l'assurance-chômage, des subventions à l'emploi et des taxes payées par les firmes et les travailleurs, les modèles étudiés sont simples mais demeurent néanmoins de bonnes représentations de la réalité.

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Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 87 (2003)
Issue (Month): 11 (October)
Pages: 2407-2430

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Handle: RePEc:eee:pubeco:v:87:y:2003:i:11:p:2407-2430
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  1. Michael Keen, 1997. "Peculiar institutions: A British perspective on tax policy in the United States," Fiscal Studies, Institute for Fiscal Studies, vol. 18(4), pages 371-400, November.
  2. Robin Boadway & Katherine Cuff & Nicolas Marceau, 2000. "Redistribution and Employment Policies with Endogenous Unemployment," Cahiers de recherche CREFE / CREFE Working Papers 121, CREFE, Université du Québec à Montréal.
  3. Marceau, Nicolas & Boadway, Robin, 1994. " Minimum Wage Legislation and Unemployment Insurance as Instruments for Redistribution," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(1), pages 67-81.
  4. Robin Boadway & Katherine Cuff & Nicolas Marceau, 2002. "Inter-Jurisdictional Competition for Firms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(3), pages 761-782, August.
  5. Robin Boadway & Katherine Cuff, 1999. "Monitoring Job Search as an Instrument for Targeting Transfers," Working Papers 982, Queen's University, Department of Economics.
  6. Joseph Stiglitz, 1999. "Taxation, Public Policy, and Dynamics of Unemployment," International Tax and Public Finance, Springer, vol. 6(3), pages 239-262, August.
  7. Guesnerie, Roger & Roberts, Kevin, 1987. "Minimum wage legislation as a second best policy," European Economic Review, Elsevier, vol. 31(1-2), pages 490-498.
  8. Beaudry, Paul & Blackorby, 1997. "Taxes and employment subsidies in an optimal redistribution program," CEPREMAP Working Papers (Couverture Orange) 9709, CEPREMAP.
  9. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
  10. Mortensen, Dale T., 1987. "Job search and labor market analysis," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 15, pages 849-919 Elsevier.
  11. Mirrlees, James A, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Wiley Blackwell, vol. 38(114), pages 175-208, April.
  12. Robin Boadway & Katherine Cuff & Nicolas Marceau, 1999. "Inter-Jurisdictional Competition for Firms: Jobs as Vehicles for Redistribution," Cahiers de recherche CREFE / CREFE Working Papers 85, CREFE, Université du Québec à Montréal, revised Jul 1999.
  13. Sorensen, Peter Birch, 1999. "Optimal tax progressivity in imperfect labour markets," Labour Economics, Elsevier, vol. 6(3), pages 435-452, September.
  14. Boadway, Robin & Cuff, Katherine, 2001. "A minimum wage can be welfare-improving and employment-enhancing," European Economic Review, Elsevier, vol. 45(3), pages 553-576, March.
  15. Johnson, G.E. & Layard, P.R.G., 1987. "The natural rate of unemployment: Explanation and policy," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 16, pages 921-999 Elsevier.
  16. Jack High (ed.), 2001. "Competition," Books, Edward Elgar, number 1751, March.
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