The consequences of introducing or tightening time limits on receiving high unemploymentbenefits are studied in a shirking model. Stricter time limits have an ambiguousimpact on the net wage, and changes of utility levels of employed workers and recipientsof high unemployment benefits have the...

The Ifo Institute has worked out a detailed proposal to reform the system of welfare benefits and made estimates regarding the consequences for employment, distribution of income and fiscal costs. The Ifo proposal aims at making the German labour market functional again without lowering the...

Redesigning the Welfare State argues that the current high level of unemployment in Germany not only creates a major challenge for the German welfare state, but is to a good extent caused by the way the country's welfare system is designed. - The authors review the public debate on labour market...

This paper shows that in a search model where future employers of trained workers donot benefit from the training in other firms, investment into general training will only be below the competitive level if workers are credit constrained. If workers are credit constrained, then the training firm...

We introduce skill groups and different production technologies into the Burdett-Mortensen model of on the job search. Supermodularity of the different skill groups in the production process leads to a positive intra-firm wage correlation between skill groups. Increasing returns to scale allow...

Since its inception, the traditional form of providing survivor benefits through public pension schemes has lost much of its legitimacy. As a result of fundamental changes in marriage behaviour and the typical division of labour between married spouses, offering non-contributory benefits of this...

The impact of a stronger work requirement for welfare recipients in a workfare program is studied in an efficiency wage model where a representative firm chooses its level of monitoring activities. A stricter workfare policy raises employment and monitoring activities. It typically increases...

The consequences of introducing or tightening time limits on receiving high unemploymentbenefits are studied in a shirking model. Stricter time limits have an ambiguousimpact on the net wage, and changes of utility levels of employed workers and recipientsof high unemployment benefits have the...