Labour Mobility and Decision Making on Social Insurance in an Integrated Market
In a two-country model, the consequences of labor mobility on social insurance levels are studied. There are two groups of workers, one with a high risk and the other one with a low risk of being nonemployed. In both countries, the decision-making function on social insurance is some weighted average of the expected utilities of both groups. In case low-risk workers are much more mobile than high-risk workers, it can be concluded that labor mobility does not necessarily have a downward effect on social insurance. In that case, coordination of decision-making would not improve levels of social insurance. Copyright 1994 by Kluwer Academic Publishers
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