In-work benefits and unemployment
2011 (English)In: International Tax and Public Finance, ISSN 0927-5940, E-ISSN 1573-6970, Vol. 18, no 1, 74-92 p.Article in journal (Refereed) Published
In-work benefits are becoming an increasingly relevant labour market policy, gradually expanding in scope and geographical coverage. This paper investigates the equilibrium impact of in-work benefits and contrasts it with the traditional partial equilibrium analysis. We find under which conditions accounting for equilibrium wage adjustments amplifies the impact of in-work benefits on search intensity, participation, employment, and unemployment, compared to a framework in which wages are fixed. We also account for the financing of these benefits and determine the level of benefits necessary to achieve efficiency in a labour market characterized by search externalities.
Place, publisher, year, edition, pages
2011. Vol. 18, no 1, 74-92 p.
In-work benefits; Search; Labour force participation; Wage adjustment
IdentifiersURN: urn:nbn:se:su:diva-71369DOI: 10.1007/s10797-010-9148-6ISI: 000286617800005OAI: oai:DiVA.org:su-71369DiVA: diva2:484727