nep-ias New Economics Papers
on Insurance Economics
Issue of 2013‒05‒24
three papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Business Management

  1. Characteristics and Employment of Applicants for Social Security Disability Insurance Over the Business Cycle By Stephan Lindner; Clark Burdick
  2. Do Extended Unemployment Benefits Lengthen Unemployment Spells? Evidence from Recent Cycles in the U.S. Labor Market By Henry S. Farber; Robert G. Valletta
  3. Economics as victim between lawyers and mathematics: An explanation for the tax credit, Bulgarian potential fraud, European unemployment and the economic crisis By Colignatus, Thomas

  1. By: Stephan Lindner; Clark Burdick
    Abstract: This study investigates the relationship between fluctuations in the short-term unemployment rate and characteristics of applicants for Social Security Disability Insurance. Using administrative records of the universe of applicants between 1991 and 2008, we find that almost all of the increase in applications and allowances during recession periods is due to increasing applications and allowances of people whose applications are either rejected or determined by vocational factors. People who apply during economic downturns also have lower income and assets at the time of application and lower earnings several years after application. Further decomposition results suggest that difficult macroeconomic conditions during the time of application account for the negative relationship between the unemployment rate and post-application earnings and employment.
    Date: 2013–05
  2. By: Henry S. Farber; Robert G. Valletta
    Abstract: In response to the Great Recession, the availability of unemployment insurance (UI) benefits was extended to an unprecedented 99 weeks in many U.S. states in the 2009-2012 period. We use matched monthly data from the CPS to exploit variation in the timing and size of the UI benefit extensions across states to estimate the overall impact of these extensions on individual exit from unemployment, and we compare the estimated impact with that for the prior extension of benefits during the much milder downturn in the early 2000s. In both periods, we find a small but statistically significant reduction in the unemployment exit rate and a small increase in the expected duration of unemployment. The effects on exits and duration are primarily due to a reduction in exits from the labor force rather than to a decrease in exits to employment (the job finding rate). Although the overall effect of UI extensions on exit from unemployment is small, it implies a substantial effect of extended benefits on the steady-state share of unemployment in the cross-section that is long-term.
    JEL: J64 J65
    Date: 2013–05
  3. By: Colignatus, Thomas
    Abstract: (1) The basic problem in OECD countries is the tax void. (2) A tax system with an exemption is more transparant than a system with a tax credit. (3) Exemption should be at the level of the net minimum wage so that such workers can work at net = gross. (4) A tax credit is a sufficient but not a necessary condition for vertical translation of a piecewise-linear tax system. (5) The Tax Plan for the 21st Century of 1998-2001 contained a deliberate misrepresentation. (6) The issue is important for the current economic crisis and European unemployment: (6a) The analysis is an element in the explanation of the aggressive export policies of Northern Europe via their low wage policies. (6b) Given the similarity of the tax policies in the OECD countries we find an explanation for the Great Stagflation since 1970 that was masked by financial deregulation. (6c) One should hope that Jeroen Dijsselbloem, the Dutch minister of Finance and chairperson of the Eurogroup, understands this issue. (7) A root cause lies in the handling of economic science in Holland. Though other countries can already benefit from the analysis presented here, it still remains better that the integrity of economic science is restored in Holland so that the full analysis becomes available.
    Keywords: tax credit, tax void, exemption, tax law, premium, insurance, fraud, lies, irregularity, boycott, Bulgaria, Holland, Europe, economic crisis, unemployment, tax harmonisation, basic income, basic benefit, heterogenous labour, minimum wage, productivity, equity, efficiency, transparancy, free lunch, political popularity, welfare state, poverty, surplus, external account, export, low wage policy, stagflation, financial deregulation, scientific integrity
    JEL: A10 H24 P16
    Date: 2013–05–18

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