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Is it wise to have unemploment accounts in high unemployment and long un employment duration economies?


  • Christian Zimmermann

    (University of Connecticut)

  • Stephane Pallage



In previous work, Pallage and Zimmermann (2010) document how an Unemployment Account system dominates an Unemployment Insurance system in many circumstances for a labor market like in the US if it is optimized. This paper reevaluates this in the context of a labor market with higher average unemployment rates and durations, using a heterogeneous DSGE model with borrowing constraints. Using the example of Austria, we establish the optimal characteristics of the Unemployment Account system and compare it to unemployment insurance and to the newly established system of accounts for severance pay.

Suggested Citation

  • Christian Zimmermann & Stephane Pallage, 2011. "Is it wise to have unemploment accounts in high unemployment and long un employment duration economies?," 2011 Meeting Papers 153, Society for Economic Dynamics.
  • Handle: RePEc:red:sed011:153

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