The effects of benefits on unemployment and wages: A comparison of unemployment compensation systems
Author: Spiezia, Vincenzo
Source: International Labour Review, 1 January 2000, vol. 139, no. 1, pp. 73-90(18)
Abstract:Elaborating upon a stylized distinction between unemployment assistance and unemployment insurance, Spiezia mounts a credible challenge to the theory that unemployment benefits invariably have undesirable effects on the labour market. Whether or not they do, he argues, depends not so much on their level as on the administrative framework within which they are provided. His theoretical analysis shows that their effect on unemployment duration and wages can be negligible if they are (largely) financed from workers' and employers' contributions and subject to eligibility conditions. The balance between efficiency and equity thus requires unemployment compensation to be separated from social assistance.
Document Type: Research Article
Publication date: January 1, 2000