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Social Insurance and Transition

  • Andrew Atkeson
  • Patrick J. Kehoe

We study the general equilibrium effects of social insurance on the transition in a model in which the process of moving workers from matches in the state sector to new matches in the private sector takes time and involves uncertainty. We find that adding social insurance may slow transition. When there are incentive problems in this rematching process, the optimal social insurance scheme may involve forced layoffs and involuntary unemployment.

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File URL: http://www.nber.org/papers/w4411.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4411.

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Date of creation: Jul 1993
Date of revision:
Publication status: published as International Economic Review. May 1996, vol. 37, no. 2.
Handle: RePEc:nbr:nberwo:4411
Note: EFG
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  1. Rogerson, Richard & Wright, Randall, 1988. "Involuntary unemployment in economies with efficient risk sharing," Journal of Monetary Economics, Elsevier, vol. 22(3), pages 501-515.
  2. Greenwood, J. & Jovanovic, B., 1988. "Financial Development, Growth, And The Distribution Of Income," RCER Working Papers 131, University of Rochester - Center for Economic Research (RCER).
  3. Aghion, P. & Blanchard, O.J., 1993. "On the Speed of Transition in Central Europe," Working papers 93-8, Massachusetts Institute of Technology (MIT), Department of Economics.
  4. Dixit, Avinash & Rob, Rafael, 1994. "Risk-sharing, adjustment, and trade," Journal of International Economics, Elsevier, vol. 36(3-4), pages 263-287, May.
  5. Greenwood, J. & Jovanovic, B., 1990. "Financial Development, Growth, And The Distribution Of Income," University of Western Ontario, The Centre for the Study of International Economic Relations Working Papers 9002, University of Western Ontario, The Centre for the Study of International Economic Relations.
  6. Bencivenga, V.R. & Smith, B.D., 1988. "Financial Intermediation And Endogenous Growth," RCER Working Papers 124, University of Rochester - Center for Economic Research (RCER).
  7. Robert E. Hall, 1980. "The Importance of Lifetime Jobs in the U.S. Economy," NBER Working Papers 0560, National Bureau of Economic Research, Inc.
  8. repec:cup:cbooks:9780521438827 is not listed on IDEAS
  9. Rogerson, Richard, 1987. "An Equilibrium Model of Sectoral Reallocation," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 824-34, August.
  10. Xavier Maret & Gerd Schwartz, 1993. "Poland; The Social Safety Net During the Transition," IMF Working Papers 93/42, International Monetary Fund.
  11. repec:cup:cbooks:9780521433297 is not listed on IDEAS
  12. Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-55, December.
  13. Andrew Atkeson & Patrick J. Kehoe, 1995. "Optimal social insurance, incentives, and transition," Working Papers 546, Federal Reserve Bank of Minneapolis.
  14. Mathias Dewatripont, 1992. "Economic Reform and Dynamic Political Constraints," ULB Institutional Repository 2013/175991, ULB -- Universite Libre de Bruxelles.
  15. Green, Jerry & Kahn, Charles M, 1983. "Wage-Employment Contracts," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 173-87, Supplemen.
  16. Mortensen, Dale T., 1987. "Job search and labor market analysis," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 15, pages 849-919 Elsevier.
  17. Chari, V V, 1983. "Involuntary Unemployment and Implicit Contracts," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 107-22, Supplemen.
  18. Philippe Aghion & Olivier Jean Blanchard, 1994. "On the Speed of Transition Central Europe," NBER Working Papers 4736, National Bureau of Economic Research, Inc.
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