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on Insurance Economics |
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Issue of 2012‒07‒14
three papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Business Management |
| By: | Cristobal Huneeus; Silvia Leiva; Alejandro Micco |
| Abstract: | Unemployment is a pressing problem in many countries in Latin America. Financial crises and increased globalization increase job turnover and therefore the risk of unemployment. To protect workers, Chile implemented an innovative unemployment insurance (UI) system. UI protects workers but creates moral hazard and self-selection issues. Using administrative data for the period 2007 to 2010, the effect of the 2009 reform of UI on job search behavior was studied. The results revealed different job search behavior between workers who use unemployment benefits and those who do not. Search efforts were found to fall as long as unemployment benefits are in place. There is strong evidence that workers who decide not to take UI despite having the right to do so have a higher probability of finding a new job. |
| JEL: | E24 J64 J65 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:4784&r=ias |
| By: | Stovicek, Klara (European Commission); Turrini, Alessandro (European Commission) |
| Abstract: | This paper proposes a methodology for benchmarking unemployment benefits systems, with a view to assess reform needs and priorities. The methodology permits to assess different dimensions of unemployment benefit systems and to consider alternative relevant benchmarks. Looking at all relevant dimensions allows to better gauge how unemployment benefit systems perform in terms of their multi-faceted objectives (such as income support and stabilisation, incentives to take up work) and to have a more thorough assessment of each objective. Comparisons with alternative benchmarks offer the possibility of assessing against more meaningful country comparators, which take into account similarities in terms of economic fundamentals, institutions and policy settings. The methodology is applied to EU countries and results are discussed. |
| Keywords: | unemployment insurance, unemployment assistance, tax and benefit policies, benchmarking, flexicurity |
| JEL: | J65 J68 H20 H53 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izapps:pp43&r=ias |
| By: | Greg Hannsgen |
| Abstract: | Recently, some have wondered whether a fiscal stimulus plan could reduce the government's budget deficit. Many also worry that fiscal austerity plans will only bring higher deficits. Issues of this kind involve endogenous changes in tax revenues that occur when output, real wages, and other variables are affected by changes in policy. Few would disagree that various paradoxes of austerity or stimulus might be relevant, but such issues can be clarified a great deal with the help of a complete heterodox model. In light of recent world events, this paper seeks to improve our understanding of the dynamics of fiscal policy and financial crises within the context of two-dimensional (2D) and five-dimensional heterodox models. The nonlinear version of the 2D model incorporates curvilinear functions for investment and consumption out of unearned income. To bring in fiscal policy, I make use of a rule with either (1) dual targets of capacity utilization and public production, or (2) a balanced-budget target. Next, I add discrete jumps and policy-regime switches to the model in order to tell a story of a financial crisis followed by a move to fiscal austerity. Then, I return to the earlier model and add three more variables and equations: (1) I model the size of the private- and public-sector labor forces using a constant growth rate and account for their social reproduction by introducing an unemployment-insurance scheme; and (2) I make the markup endogenous, allowing its rate of change to depend, in a possibly nonlinear way, on capacity utilization, the real wage relative to a fixed norm, the employment rate, profitability, and the business sector’s desired capital-stock growth rate. In the conclusion, I comment on the implications of my results for various policy issues. |
| Keywords: | Financial Crisis; Post-Keynesian Economics; Fiscal-policy Rule; Dynamical System; Markup Dynamics; Kalecki-Steindl Model of Effective Demand; Hyman Minsky; Automatic Stabilizers; Growth Cycles; Budget Deficit; Capacity-utilization Targeting Rule; Historical Time; Policy Regime Switches; Keynesian Kaleidics; Chartalism; Distributive Curve |
| JEL: | E12 E32 E62 J65 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_723&r=ias |