The joint design of unemployment insurance and employment protection

a first pass

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Last edited by MARC Bot
August 13, 2020 | History

The joint design of unemployment insurance and employment protection

a first pass

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Unemployment insurance and employment protection are typically discussed and studied in isolation. In this paper, we argue that they are tightly linked, and we focus on their joint optimal design. We start our analysis with a simple benchmark, with risk averse workers, risk neutral firms, and random shocks to productivity. In this benchmark, we show that unemployment insurance comes with employment protection - in the form of layoff taxes; indeed, optimality requires that layoff taxes be equal to unemployment benefits. We then explore the implications of four broad categories of deviations: limits on insurance, limits on layoff taxes, ex-post wage bargaining, and ex-ante heterogeneity of firms or workers. We show how the design must be modified in each case. The scope for insurance may be more limited than in the benchmark; so may the scope for employment protection. The general principle remains however, namely the need to look at unemployment insurance and employment protection together, rather than in isolation. Keywords: Unemployment insurance, employment protection, unemployment benefits, layoff taxes, layoffs, severance payments. JEL Classifications: D60, E62, H21, J30, J32, J38, J65.

Publish Date
Language
English
Pages
32

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Cover of: The joint design of unemployment insurance and employment protection
The joint design of unemployment insurance and employment protection: a first pass
2005, Massachusetts Institute of Technology, Dept. of Economics
in English - Rev.

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Edition Notes

"April 1, 2004. -- Revised: November 11, 2005."

Includes bibliographical references (p. 30-31).

Abstract in HTML and working paper for download in PDF available via World Wide Web at the Social Science Research Network.

Published in
Cambridge, MA
Series
Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 04-15, Revised, Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 04-15.

The Physical Object

Pagination
32 p. ;
Number of pages
32

ID Numbers

Open Library
OL24640573M
Internet Archive
jointdesignofune00blan
OCLC/WorldCat
64276964

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August 13, 2020 Edited by MARC Bot remove fake subjects
May 2, 2011 Created by ImportBot initial import