Staying on the dole
We develop a simple model of labor market participation, human capital degradation, and re-training. We focus on how non-participation, as a distinct state from unemployment and employment, is determined by the welfare system in interaction with labor market conditions and personal characteristics. We provide a tractable framework to analyze how the decisions to exit the labor force and to mitigate human capital degradation by re-training depend on a broad range of factors such as education, skill degradation, age, labor market shocks, labor taxes, unemployment insurance benefits and social assistance. We extend our framework by allowing for time-inconsistent choices and demonstrate the possibility of an unemployment trap.
Year of publication: |
2007
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Authors: | Strulik, Holger ; Tyran, Jean-Robert ; Vanini, Paolo |
Publisher: |
Hannover : Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät |
Subject: | Theorie | Arbeitslosigkeit | Arbeitslosenversicherung | Arbeitsuche | Unemployment | Non-Participation | Skill Degradation | Re-training | Unemployment Bene?ts | Social Assistance | Present-Biased Preferences |
Saved in:
freely available
Series: | Diskussionsbeitrag ; 377 |
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Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Working Paper |
Language: | English |
Other identifiers: | 549846581 [GVK] hdl:10419/27187 [Handle] RePEc:han:dpaper:dp-377 [RePEc] |
Classification: | J64 - Unemployment: Models, Duration, Incidence, and Job Search ; J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc ; J38 - Public Policy |
Source: |
Persistent link: https://www.econbiz.de/10010264931