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Should unemployment insurance cover partial unemployment?

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  • Susanne Ek Spector

    (Nordea Markets, Sweden, and IZA, Germany)

Abstract

A considerable share of the labor force consists of underemployed part-time workers: employed workers who, for various reasons, are unable to work as much as they would like to. Offering unemployment benefits to part-time unemployed workers is controversial. On the one hand, such benefits can strengthen incentives to take a part-time job rather than remain fully unemployed, thus raising the probability of obtaining at least some employment. On the other hand, these benefits weaken incentives for part-time workers to look for full-time employment. It is also difficult to distinguish people who work part-time by choice from those who do so involuntarily.

Suggested Citation

  • Susanne Ek Spector, 2022. "Should unemployment insurance cover partial unemployment?," IZA World of Labor, Institute of Labor Economics (IZA), pages 199-199, June.
    • Handle: RePEc:iza:izawol:journl:2022:n:199
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    References listed on IDEAS

    as
    1. Susanne Ek & Bertil Holmlund, 2015. "Part-time unemployment and optimal unemployment insurance," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(2), pages 201-223, April.
    2. David S. Lee & Pauline Leung & Christopher J. O’Leary & Zhuan Pei & Simon Quach, 2021. "Are Sufficient Statistics Necessary? Nonparametric Measurement of Deadweight Loss from Unemployment Insurance," Journal of Labor Economics, University of Chicago Press, vol. 39(S2), pages 455-506.
    3. Kyyrä, Tomi, 2010. "Partial unemployment insurance benefits and the transition rate to regular work," European Economic Review, Elsevier, vol. 54(7), pages 911-930, October.
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    10. Cahuc, Pierre & Benghalem, Hélène & Villedieu, Pierre, 2021. "The Lock-in Effects of Part-time Unemployment Benefits," CEPR Discussion Papers 15921, C.E.P.R. Discussion Papers.
    11. Hélène Benghalem & Pierre Cahuc & Pierre Villedieu, 2021. "The Lock-In Effects of Part-Time Unemployment Benefits," Working Papers hal-03389159, HAL.
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    16. Auray, Stéphane & Lepage-Saucier, Nicolas, 2021. "Stepping-stone effect of atypical jobs: Could the least employable reap the most benefits?," Labour Economics, Elsevier, vol. 68(C).
    17. Caliendo, Marco & Künn, Steffen & Uhlendorff, Arne, 2016. "Earnings exemptions for unemployed workers: The relationship between marginal employment, unemployment duration and job quality," Labour Economics, Elsevier, vol. 42(C), pages 177-193.
    18. Hélène Benghalem & Pierre Cahuc & Pierre Villedieu, 2021. "The Lock-In Effects of Part-Time Unemployment Benefits," SciencePo Working papers hal-03389159, HAL.
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    Cited by:

    1. Kyyrä, Tomi & Pesola, Hanna & Rissanen, Aarne, 2017. "Unemployment Insurance in Finland: A Review of Recent Changes and Empirical Evidence on Behavioral Responses," Research Reports 184, VATT Institute for Economic Research.
    2. Hélène Benghalem & Pierre Cahuc & Pierre Villedieu, 2022. "The Lock-in Effects of Part-Time Unemployment Benefits," Working Papers hal-03881625, HAL.
    3. Hélène Benghalem & Pierre Cahuc & Pierre Villedieu, 2022. "The Lock-in Effects of Part-Time Unemployment Benefits," SciencePo Working papers Main hal-03881625, HAL.

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    More about this item

    Keywords

    active labor market policies; part-time work; part-time unemployment; partial unemployment insurance;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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