This paper discusses the concept of 'externalities '. It starts with a brief discussion of market failures in the neoclassical economic framework. It then proceeds to a definition of externalities, thereby distinguishing external effects from other sorts of 'unpriced effects '. Finally, some...

In The Netherlands, the average exit rate out of welfare is dramatically low. Most welfare recipients have to comply with guidelines on job search effort that are imposed by the welfare agency. If they do not, then a sanction in the form of a temporarily benefit reduction can be imposed. This...

We study the impact of active labour market policies (ALMPs) in the context of an applied general equilibrium model for the Dutch labour market. By using a calibrated general equilibrium model we try to narrow down the possible range of the net effect of various ALMPs. We consider the impact of...

We analyze the impact of unemployment benefits and minimum wages using an equilibrium search model which allows for dispersion of benefits and productivity levels, job-to-job transitions, and structural and frictional unemployment. The estimation method uses readily available aggregate data on...

A longstanding puzzle of empirical economics is that average labor productivity de­clines during recessions and increases during booms. This paper provides a framework to assess the empirical importance of competing hypotheses for explaining the observed pro­cyclicality. For each competing...

We combine micro and macro unemployment duration data to study the effects of the business cycle on the outflow from unemployment. We allow the cycle to affect individual exit probabilities of unemployed workers as well as the composition of the total inflow into unemployment. We estimate the...

This paper provides a review of the economic literature on social security systems and of practical experiences with building social security institutions. The focus is on the design of the institutions, and on the complicated relation between social security, economic welfare and economic...

In most studies on individual labor market transitions, the search process leading to job offers is a black box. In this paper we specify and estimate a search model that distinguishes between formal (applications) and informal (referrals) search methods. Job offers can be obtained by either...

Between 1982 and 2000, the Netherlands experienced a remarkable economie recovery. Labour participation rose from a European low of 52 percent to the European average of 65 percent. Unemployment decreased from a high of 14 percent to a present-day low of 2% percent, while government finances and...