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Unemployment Benefits as a Means for Optimal Redistribution

Author

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  • Per Engström

Abstract

This paper explores the rationale for unemployment benefits as a complement to optimal nonlinear income taxation. We find under plausible assumptions that the optimal unemployment benefits targeted at the low-skilled will be higher than the pure insurance and efficiency purposes would prescribe. The paper thus gives a theoretical justification for using unemployment benefits for redistribution.

Suggested Citation

  • Per Engström, 2009. "Unemployment Benefits as a Means for Optimal Redistribution," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 65(1), pages 21-36, March.
    • Handle: RePEc:mhr:finarc:urn:sici:0015-2218(200903)65:1_21:ubaamf_2.0.tx_2-3
    DOI: 10.1628/001522108X444143
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    More about this item

    Keywords

    optimal nonlinear income taxation; unemployment benefits; redistribution;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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