IDEAS home Printed from
   My bibliography  Save this article

Model Distraction: A Comment on Daveri and Tabellini


  • Andrea Imperia


An article by Francesco Daveri and Guido Tabellini (2000) combines empirics and a general-equilibrium overlapping-generations model to recommend the reduction of labor taxation and pension expenditures. I demonstrate that, in the model, unemployment would be zero if unemployment benefits remained between zero and a certain value that is dependent on the level of wage taxation. My demonstration leads to two questions: (1) Why should the government introduce unemployment benefits in an economy that otherwise would always operate at full employment? (2) Why is the reader led to believe that the reduction of labor taxation and pension expenditure are the main economic policy indications that derive from the model? Since, in the Daveri and Tabellini model, unemployment benefits are a waste of resources, the reduction of unemployment benefits is the best way to reduce unemployment.

Suggested Citation

  • Andrea Imperia, 2013. "Model Distraction: A Comment on Daveri and Tabellini," Econ Journal Watch, Econ Journal Watch, vol. 10(1), pages 15-24, January.
  • Handle: RePEc:ejw:journl:v:10:y:2013:i:1:p:15-24

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Deirdre McCloskey, 2008. "Adam Smith, the Last of the Former Virtue Ethicists," History of Political Economy, Duke University Press, vol. 40(1), pages 43-71, Spring.
    2. Deirdre Mccloskey, 2008. "Not by P Alone: A Virtuous Economy," Review of Political Economy, Taylor & Francis Journals, vol. 20(2), pages 181-197.
    3. Raphael, D. D., 2009. "The Impartial Spectator: Adam Smith's Moral Philosophy," OUP Catalogue, Oxford University Press, number 9780199568260, June.
    4. Sugden, Robert, 1991. "Rational Choice: A Survey of Contributions from Economics and Philosophy," Economic Journal, Royal Economic Society, vol. 101(407), pages 751-785, July.
    5. George J. Stigler, 1971. "Smith's Travels on the Ship of State," History of Political Economy, Duke University Press, vol. 3(2), pages 265-277, Fall.
    6. Klein, Daniel B., 2014. "Knowledge and Coordination: A Liberal Interpretation," OUP Catalogue, Oxford University Press, number 9780199355327, June.
    7. Edward P. Lazear, 2000. "Economic Imperialism," The Quarterly Journal of Economics, Oxford University Press, vol. 115(1), pages 99-146.
    8. Searle, John R., 2005. "What is an institution?," Journal of Institutional Economics, Cambridge University Press, vol. 1(01), pages 1-22, June.
    Full references (including those not matched with items on IDEAS)

    More about this item


    European unemployment; unemployment benefits; wage taxation; trade unions; pension system reform;

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ejw:journl:v:10:y:2013:i:1:p:15-24. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jason Briggeman). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.