Unemployment benefit generosity in a life-cycle model with endogenous job-serch effort
Unemployment in Austria has been considerably low in the past decades compared to other European countries. Nevertheless, recent increases in the past five years started a controversial discussion about the generous unemployment insurance system in place. The current government, therefore, argues to...
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Uppsala universitet, Nationalekonomiska institutionen
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ndltd-UPSALLA1-oai-DiVA.org-uu-3522032018-06-28T05:29:03ZUnemployment benefit generosity in a life-cycle model with endogenous job-serch effortengKaradakic, RenéUppsala universitet, Nationalekonomiska institutionen2018Life-cycleunemployment insurancejob-searcheffortunemployment benefitslabour market reformEconomicsNationalekonomiUnemployment in Austria has been considerably low in the past decades compared to other European countries. Nevertheless, recent increases in the past five years started a controversial discussion about the generous unemployment insurance system in place. The current government, therefore, argues to change the insurance system similar to the German HARTZ IV reform, although the effects on unemployment have proven to be ambiguous in Germany. I introduce a discrete time life-cycle model with endogenous job-search effort to inquire the potential effects of such a reform on long- and short-term unemployment, as well as individuals' job-search incentives. Individuals are ex-ante heterogeneous in their labour income possibilities and are subject to exogenous layoffs throughout their life. The model suggests that the proposed reform would reduce long-term unemployment substantially, however, to the cost of a larger amount of short-term unemployment spells and decreased overall welfare. Job-search effort over the whole life-cycle appears to increase, with the largest differences at the end of the life-cycle. Student thesisinfo:eu-repo/semantics/bachelorThesistexthttp://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-352203application/pdfinfo:eu-repo/semantics/openAccess |
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Life-cycle unemployment insurance job-search effort unemployment benefits labour market reform Economics Nationalekonomi |
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Life-cycle unemployment insurance job-search effort unemployment benefits labour market reform Economics Nationalekonomi Karadakic, René Unemployment benefit generosity in a life-cycle model with endogenous job-serch effort |
description |
Unemployment in Austria has been considerably low in the past decades compared to other European countries. Nevertheless, recent increases in the past five years started a controversial discussion about the generous unemployment insurance system in place. The current government, therefore, argues to change the insurance system similar to the German HARTZ IV reform, although the effects on unemployment have proven to be ambiguous in Germany. I introduce a discrete time life-cycle model with endogenous job-search effort to inquire the potential effects of such a reform on long- and short-term unemployment, as well as individuals' job-search incentives. Individuals are ex-ante heterogeneous in their labour income possibilities and are subject to exogenous layoffs throughout their life. The model suggests that the proposed reform would reduce long-term unemployment substantially, however, to the cost of a larger amount of short-term unemployment spells and decreased overall welfare. Job-search effort over the whole life-cycle appears to increase, with the largest differences at the end of the life-cycle. |
author |
Karadakic, René |
author_facet |
Karadakic, René |
author_sort |
Karadakic, René |
title |
Unemployment benefit generosity in a life-cycle model with endogenous job-serch effort |
title_short |
Unemployment benefit generosity in a life-cycle model with endogenous job-serch effort |
title_full |
Unemployment benefit generosity in a life-cycle model with endogenous job-serch effort |
title_fullStr |
Unemployment benefit generosity in a life-cycle model with endogenous job-serch effort |
title_full_unstemmed |
Unemployment benefit generosity in a life-cycle model with endogenous job-serch effort |
title_sort |
unemployment benefit generosity in a life-cycle model with endogenous job-serch effort |
publisher |
Uppsala universitet, Nationalekonomiska institutionen |
publishDate |
2018 |
url |
http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-352203 |
work_keys_str_mv |
AT karadakicrene unemploymentbenefitgenerosityinalifecyclemodelwithendogenousjobsercheffort |
_version_ |
1718708291135078400 |