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Voting for Jobs: Policy Persistence and Unemployment

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  • Saint-Paul, Gilles

Abstract

This paper studies, in a model with unemployment, how labour market status affects the preferences for public spending, in the form of a public good or subsidies. It then derives the implications for the dynamics of government expenditures under the hypothesis of majority voting. These will exhibit positive persistence if the employed are marginally more powerful than the unemployed, and negative persistence if the unemployed are marginally more powerful. Under a uniform distribution of tastes for the public good, there is no persistence. The preferences of the unemployed may be non-single-peaked, so that high unemployment may destroy the existence of a voting equilibrium.

Suggested Citation

  • Saint-Paul, Gilles, 1996. "Voting for Jobs: Policy Persistence and Unemployment," CEPR Discussion Papers 1428, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:1428
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    Cited by:

    1. Marimon, Ramon & Zilibotti, Fabrizio, 1999. "Unemployment vs. Mismatch of Talents: Reconsidering Unemployment Benefits," Economic Journal, Royal Economic Society, vol. 109(455), pages 266-291, April.
    2. John Hassler & José V. Rodríguez Mora & Kjetil Storesletten & Fabrizio Zilibotti, 1998. "Equilibrium unemployment insurance," Economics Working Papers 605, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 1999.
    3. Anil Duman, 2010. "Risks in the labor market and social insurance preferences: Germany and the USA," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 37(2), pages 150-164, January.

    More about this item

    Keywords

    Fiscal Policy; Job Creation; Political Economy; Public Spending; Unemployment; Voting;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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