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Bargaining Structure and Regional Unemployment Insurance

  • Helge Sanner

This study examines how the size of trade unions relative to the labor force impacts on the desirability of different organizational forms of self- financing unemployment insurance (UI) for workers, firms, and with reference to an efficiency criterion. For this purpose, we respectively numerically compare the outcome of a model with a uniform payroll tax to a model where workers pay taxes according to their systematic risk of unemployment. Our results highlight the importance of the bargaining structure for the assessment of a particular UI scheme. Most importantly, it depends on the size of the unions whether effciency favors a uniform or a differentiated UI scheme.

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File URL: http://nbn-resolving.de/urn:nbn:de:kobv:517-opus-13747
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Paper provided by Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät in its series Volkswirtschaftliche Diskussionsbeiträge with number 44.

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Date of creation: 2001
Date of revision: May 2002
Publication status: Published in Labour, Vol. 17.2 (2003), pp. 229-246 (revised version)
Handle: RePEc:pot:vwldis:44
Contact details of provider: Postal: Karl-Marx-Str. 67, 14482 Potsdam
Phone: 0331/977-4543
Fax: 0331/977-4615
Web page: http://www.uni-potsdam.de/fakultaeten/wiso.html
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  1. Feldstein, Martin S, 1976. "Temporary Layoffs in the Theory of Unemployment," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 937-57, October.
  2. Holmlund, Bertil & Lundborg, Per, 1999. "Wage bargaining, union membership, and the organization of unemployment insurance," Labour Economics, Elsevier, vol. 6(3), pages 397-415, September.
  3. David G. Blanchflower & Andrew J. Oswald & Peter Sanfey, 1992. "Wages, Profits and Rent-Sharing," NBER Working Papers 4222, National Bureau of Economic Research, Inc.
  4. Feldstein, Martin S, 1978. "The Effect of Unemployment Insurance on Temporary Layoff Unemployment," American Economic Review, American Economic Association, vol. 68(5), pages 834-46, December.
  5. Andrew Oswald, 1984. "Efficient Contracts are on the Labour Demand Curve: Theory and Facts," Working Papers 555, Princeton University, Department of Economics, Industrial Relations Section..
  6. Pissarides, Christopher A., 1998. "The impact of employment tax cuts on unemployment and wages; The role of unemployment benefits and tax structure," European Economic Review, Elsevier, vol. 42(1), pages 155-183, January.
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