IDEAS home Printed from https://ideas.repec.org/a/ucp/jlabec/v6y1988i4p493-514.html
   My bibliography  Save this article

Human Capital Accumulation and the Optimal Level of Unemployment Insurance Provision

Author

Listed:
  • Brown, Eleanor
  • Kaufold, Howard

Abstract

Previous studies of optimal unemployment insurance design ignore the impact of unemployment insurance on human capital investment decisions. The authors show that fully experience-rated unemployment insurance increases investment in human capital when future employment opportunities are not known with certainty. In the presence of wage taxation, the optimal level of unemployment insurance trades off full insurance and the impact, through human capital, of unemployment insurance on the wage tax base. This trade-off, in turn, depends on the extent to which human capital accumulation reallocates labor between market and untaxed nonmarket activities. Taxation of unemployment insurance benefits increases the optimal level of unemployment insurance provision. Copyright 1988 by University of Chicago Press.

Suggested Citation

  • Brown, Eleanor & Kaufold, Howard, 1988. "Human Capital Accumulation and the Optimal Level of Unemployment Insurance Provision," Journal of Labor Economics, University of Chicago Press, vol. 6(4), pages 493-514, October.
  • Handle: RePEc:ucp:jlabec:v:6:y:1988:i:4:p:493-514
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/298193
    File Function: full text
    Download Restriction: Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JOLE for details.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Johannes F. Schmieder & Till von Wachter, 2016. "The Effects of Unemployment Insurance Benefits: New Evidence and Interpretation," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 547-581, October.
    2. FLam, Sjur Didrik & Risa, Alf Erling, 1995. "Market Insurance, Social Insurance, and Education," Journal of Population Economics, Springer;European Society for Population Economics, vol. 8(2), pages 149-160, May.
    3. World Bank, 2001. "Poverty and Income Distribution in a High Growth Economy : The Case of Chile 1987-98, Volume 2. Background Papers," World Bank Other Operational Studies 15469, The World Bank.
    4. Carlos E. da Costa & Lucas Maestri, 2005. "The Interaction Between Unemployment Insurance And Human Capital Policies," Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33rd Brazilian Economics Meeting] 089, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    5. Dan Bernhardt & Steeve Mongrain, 2010. "The Layoff Rat Race," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(1), pages 185-210, March.
    6. Brent Kreider, 2008. "Optimal Wage Taxation When Human Capital And Employment Are Endogenous," Economic Inquiry, Western Economic Association International, vol. 46(4), pages 660-675, October.
    7. Walter Nicholson & Karen Needels & Heinrich Hock, 2014. "Unemployment Compensation During the Great Recession: Theory and Evidence," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(1), pages 187-218, March.
    8. Chetty, Raj, 2006. "A general formula for the optimal level of social insurance," Journal of Public Economics, Elsevier, vol. 90(10-11), pages 1879-1901, November.
    9. repec:zbw:hohpro:348 is not listed on IDEAS
    10. Chakraborty, Bidisha & Chakraborty, Kamalika, 2016. "Low Level Equilibrium Trap, Unemployment, School Quality, Child Labour and Human Capital Formation," MPRA Paper 74621, University Library of Munich, Germany.
    11. Schneider Brit S. & Schneider Udo & Ulrich Volker, 2007. "Health and the Decision to Invest in Education," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 227(5-6), pages 725-746, October.
    12. Carsten Helm & Dominique Demougin, 2012. "Incentive Contracts and Efficient Unemployment Benefits in a Globalized World," Working Papers V-348-12, University of Oldenburg, Department of Economics, revised Aug 2012.
    13. Jonathan Gruber, 1994. "The Consumption Smoothing Benefits of Unemployment Insurance," NBER Working Papers 4750, National Bureau of Economic Research, Inc.
    14. repec:old:wpaper:348 is not listed on IDEAS
    15. Castro-Fernandez, Rodriguo & Wodon, Quentin, 2002. "Protecting the Unemployed in Chile: From State Assistance to Individual Insurance?," MPRA Paper 15416, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    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:ucp:jlabec:v:6:y:1988:i:4:p:493-514. 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: (Journals Division). General contact details of provider: http://www.journals.uchicago.edu/JOLE/ .

    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.