This paper explores how the introduction of an experience rated system of unemployment insurance affects employment and welfare in a model where implicit contracts between firms and workers give rise to wage rigidities and unemployment. In the literature, it has been argued that experience rated...

This paper shows that outsourcing of parts of the workforce in unionized firms leads to wage moderation and as long as the share of the outsourced workforce is not too large, this wage-moderation effect on domestic employment outweighs the direct substitution effect so that domestic employment...

This paper highlights the critical role that demand-shock and policy-shock induced finite changes play for the unconventional employment consequences of such shocks at a general equilibrium of a multi-sector competitive economy. A labour market reform that lowers the institutional costs of...

We show that digital capital and working from home were essential for the resilience of local labour markets in the context of the COVID-19 crisis in Germany. Employment responses differed widely across local labour markets, with differences in short-time work rates of up to 30 percentage points...

We study empirically how various labor market institutions - (i) union density, (ii) unemployment benefit remuneration, and (iii) employment protection - shape fiscal multipliers and output volatility. Our theoretical model highlights that more stringent labor market institutions attenuate both...

The macroeconomic effects on growth, investment and private sector employment of different ways of rolling back the welfare state are analysed. Cutting public spending on private goods induces a lower interest rate, a higher wage, a lower capital stock and a fall in employment. Cutting public...

Workfare proposals concentrate on the work incentives for welfare recipients, thus focusing on the labor supply side. This paper analyzes the effects workfare has on labor demand when the labor market is unionized. As workfare reduces the number of recipients of public financial assistance, a...

It has turned out to be difficult to adjust welfare-state arrangements to new circumstances. This paper emphasizes developments in the labor market and changes in the structure and preferences of the family. The former include changes in demography, productivity growth and international linkages...

A reform of a pay-as-you-go social security makes the pensioners worse off and the working generations better off in the period of the reform (in a dynamically efficient economy without altruism). The observed reluctance across all age groups to support such reforms is usually explained by the...

This paper sets up a general oligopolistic equilibrium model with unionized labor markets. By accounting for productivity differences, the model features profit and wage differentials across industries. We use this setting to study the impact of trade liberalization on employment, welfare, and...