Disincentive Effects of Unemployment Insurance Benefits: Maximum Benefit Duration Versus Benefit Level
نویسندگان
چکیده
منابع مشابه
Duration of Unemployment Benefits, Benefit Years Ended in 1942
F O R T H E U N E M P L O Y E D W O R K E R , the number of weeks he can draw benefits in a year, together with the amount of benefits he draws per week, is of special importance. Duration of benefits is important in determining not only the adequacy of unemployment compensation but also the total cost of benefit payments and hence the solvency of unemployment compensation funds. Consideration ...
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We use a Canadian survey of the unemployed to examine how household expenditures after a job loss respond to the level of income replacement provided by UI. We isolate a liquidity constraint or ‘transitory income’ effect from the ‘permanent income’ shock of job loss, and from the costs of working. We find significant effects of varying the replacement ratio among the third of the sample who did...
متن کاملDuration of Unemployment Benefit Payments in 27 States
in 27 States* THE DURATION OF B E N E F I T PAYMENTS under an unemployment compensation system based on a pay-roll tax must necessarily be limited if the system is to remain solvent. The State laws, with one exception, determine this limit by stating the amount of money a claimant can receive in benefits during a 1-year period called the benefit year. Benefits are usually paid weekly, and the n...
متن کاملOn the Reservation Wages and Liquidity Constraint
This paper argues that a risk averse of workers after-tax reservation wage the difference between her reservation wage and the tax needed to fund the unemployment insurance system when liquidity constraint binds exists and it is unique. The optimality of unemployment insurance based on the responsiveness of reservation wage to unemployment benefit shows the disincentive effect, i.e. higher unem...
متن کاملEffects of Unemployment Insurance Benefits in a Life-Cycle Model
In a life-cycle model, we calculate the contribution of the generosity of unemployment insurance (UI) on the unemployment rates in Canada and the U.S. The model predicts a 0.81% difference in unemployment rates (one third of the actual difference) in these countries. Social welfare improves if the benefit ratio increases from 45 percent to 55 percent of the working income. Savings drop and aver...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2010
ISSN: 1556-5068
DOI: 10.2139/ssrn.1635897