IDEAS home Printed from https://ideas.repec.org/p/crs/wpaper/2003-17.html
   My bibliography  Save this paper

Unemployment Insurance and Labor Reallocation

Author

Listed:
  • Franck Malherbet

    (Crest)

  • Mustafa Ulus

    (Crest)

Abstract

In this paper, an equilibrium search-and-matching model of a segmented labormarket has been developed to assess the effects of unemployment insuranceand its financing on labor allocation across heterogeneous economic sectors (industries).Heterogeneity stems from different rates of labor turnover and levelsof productivity. The model has been applied to Turkey, which is currently introducingan unemployment insurance system. The results can be extended toa wide range of countries however. Our analysis leads us to argue that with apayroll taxation system, more generous unemployment payments increase theimplicit subsidy to volatile sectors, which in turn leads a flow of workers to thesesectors. Conversely, a switch from a payroll tax system to an experience-ratedsystem makes it possible to reduce the implicit lay-off subsidy. This in turn stabilizesemployment by reducing the size of the volatile sectors. Furthermore, ithas been proved that experience rating has a non-trivial effect on total output.

Suggested Citation

  • Franck Malherbet & Mustafa Ulus, 2003. "Unemployment Insurance and Labor Reallocation," Working Papers 2003-17, Center for Research in Economics and Statistics.
  • Handle: RePEc:crs:wpaper:2003-17
    as

    Download full text from publisher

    File URL: http://crest.science/RePEc/wpstorage/2003-17.pdf
    File Function: Crest working paper version
    Download Restriction: no

    Citations

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


    Cited by:

    1. Olivier Charlot & Franck Malherbet & Mustafa Ulus, 2016. "Unemployment Compensation and the Allocation of Labor in Developing Countries," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 18(3), pages 385-416, June.
    2. repec:ces:ifodic:v:3:y:2005:i:2:p:14567656 is not listed on IDEAS
    3. José María Arranz & Carlos García Serrano, 2015. "Los sistemas de prestaciones por desempleo de “experience rating”. Un análisis de los despidos temporales y los subsidios cruzados en España," Hacienda Pública Española, IEF, vol. 212(1), pages 129-168, March.
    4. Julia Fath & Clemens Fuest, 2005. "Experience Rating of Unemployment Insurance in the US: A Model for Europe?," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(2), pages 45-50, 07.

    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:crs:wpaper:2003-17. 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: (Sri Srikandan). General contact details of provider: http://edirc.repec.org/data/crestfr.html .

    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.