The current unemployment insurance and employment protection legislation were set up in an environment in which …

retraining for new employment in the expanding sector. The paper derives an optimal welfare policy which combines the design of …

implications for employment and income of welfare schemes often advocated as less distortionary. We show that reducing unemployment … benefits in favour of income subsidies (social benefits) reduces employment in general equilibrium and also the income of low … deterioration. To support employment, we suggest that systems grounded in contribution-based unemployment insurance schemes are to …