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The impact of benefit sanctions on equilibrium wage dispersion and job vacancies

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  • Sebastien Menard

Abstract

Usually, the literature on benefit sanctions focuses on the effects on labour supply. In this paper, we integrate commuting costs in an equilibrium job search model with wages posting to analyse the effects of job search monitoring on labour demand. We show that benefit sanctions increase job creation, but degrade the job quality and the average job-productivity. In addition, we emphasise that the optimal UB system is characterised by using both benefit sanctions and the mutualisation of commuting costs.
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  • Sebastien Menard, 2019. "The impact of benefit sanctions on equilibrium wage dispersion and job vacancies," TEPP Working Paper 2019-08, TEPP.
    • Handle: RePEc:tep:teppwp:wp19-08
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