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Should unemployment insurance cover partial unemployment?

Author

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  • Susanne Ek Spector

    (Confederation of Swedish Enterprise, 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, 2015. "Should unemployment insurance cover partial unemployment?," IZA World of Labor, Institute of Labor Economics (IZA), pages 199-199, October.
  • Handle: RePEc:iza:izawol:journl:y:2015:n:199
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    References listed on IDEAS

    as
    1. McCall, Brian P, 1996. "Unemployment Insurance Rules, Joblessness, and Part-Time Work," Econometrica, Econometric Society, vol. 64(3), pages 647-682, May.
    2. 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.
    3. Kory Kroft & Fabian Lange & Matthew J. Notowidigdo, 2013. "Duration Dependence and Labor Market Conditions: Evidence from a Field Experiment," The Quarterly Journal of Economics, Oxford University Press, vol. 128(3), pages 1123-1167.
    4. Bart, COCKX & Stéphane, ROBIN & Christian, GOEBEL, 2006. "Income support policies for part-time workers : a stepping-stone to regular jobs ? An application to young long-terme unemployed women in Belgium," Discussion Papers (ECON - Département des Sciences Economiques) 2006050, Université catholique de Louvain, Département des Sciences Economiques.
    5. 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.
    6. Kyyrä, Tomi & Parrotta, Pierpaolo & Rosholm, Michael, 2013. "The effect of receiving supplementary UI benefits on unemployment duration," Labour Economics, Elsevier, vol. 21(C), pages 122-133.
    7. Bart Cockx & Christian Goebel & Stéphane Robin, 2013. "Can income support for part-time workers serve as a stepping-stone to regular jobs? An application to young long-term unemployed women," Empirical Economics, Springer, vol. 44(1), pages 189-229, February.
    8. Raymond Munts, 1970. "Partial Benefit Schedules in Unemployment Insurance: Their Effect on Work Incentive," Journal of Human Resources, University of Wisconsin Press, vol. 5(2), pages 160-176.
    9. Arlene Holen & Stanley Horowitz, 1974. "Partial Unemployment Insurance Benefits and the Extent of Partial Unemployment," Journal of Human Resources, University of Wisconsin Press, vol. 9(3), pages 420-422.
    10. Feldstein, Martin S, 1976. "Temporary Layoffs in the Theory of Unemployment," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 937-957, October.
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    Citations

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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.

    More about this item

    Keywords

    active labor market policies; part-time work; part-time unemployment; partial unemployment insurance;

    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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