We analyze and compare the long-run effects for a country introducing a capital-funded pension pillar in two scenarios: The case of separate capital markets, on the one hand, and the case of integrated capital markets (a capital market union), on the other hand. Our analysis is based on...

The paper provides a theoretical rationale for flexicurity policies, which consist of low employment protection, generous unemployment insurance and active labor market programmes. It analyzes in which conditions flexicurity can be optimal. Low employment protection encourages costly education...

Idiosyncratic labor risk is a prevalent phenomenon with important implications for individual choices. In labor market research it is commonly assumed that agents have rational expectations and therefore correctly assess the risk they face in the labor market. We analyse survey data for the U.S....