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Endogenous Unemployment Insurance and Regionalisation

  • Helge Sanner

Our analysis is concerned with the impact of a regionalisation of unemployment insurance (UI) on workers’ preferences, on firms’ profits, and on effciency. The existence and the extent of UI are endogenously derived by maximising an objective function of the state. Three different types of regionalisation are considered which differ with respect to the area the UI objective function is related to, and with respect to the policy variable used to maximise it. It comes to light that workers are always in favour of central UI, while it depends on the type of regionalisation whether or not firms are better off with regional or with central UI. The same somewhat surprising result applies for efficiency.

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Paper provided by Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät in its series Volkswirtschaftliche Diskussionsbeiträge with number 45.

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Date of creation: May 2001
Date of revision: Dec 2001
Publication status: Published in "Labor Markets and Social Security" (John T. Addison, Paul J.J. Welfens, Eds.), 2. edition, 2003 (revised version)
Handle: RePEc:pot:vwldis:45
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. Creedy, John & McDonald, Ian M, 1991. "Models of Trade Union Behaviour: A Synthesis," The Economic Record, The Economic Society of Australia, vol. 67(199), pages 346-59, December.
  2. Christopher A. Pissarides, 1997. "The Impact of Employment Tax Cuts on Unemployment and Wages: The Role of Unemployment Benefits and Tax Structure," CEP Discussion Papers dp0361, Centre for Economic Performance, LSE.
  3. repec:cup:cbooks:9780521027922 is not listed on IDEAS
  4. Wildasin, David E. & Douglas Wilson, John, 1991. "Theoretical issues in local public economics : An overview," Regional Science and Urban Economics, Elsevier, vol. 21(3), pages 317-331, November.
  5. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 160-93.
  6. Helge Sanner, 2001. "Regional Unemployment Insurance," Volkswirtschaftliche Diskussionsbeiträge 41, Universität Potsdam, Wirtschafts- und Sozialwissenschaftliche Fakultät.
  7. repec:cup:cbooks:9780521233293 is not listed on IDEAS
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