DP2541 Measuring the Equilibrium Effects of Unemployment Benefits Dispersion
|Author(s):||Gerard van den Berg, G Ridder, Aico van Vuuren|
|Publication Date:||August 2000|
|Keyword(s):||Benefit Levels, Equilibrium Search, Minimum Wages, Wages, Welfare|
|JEL(s):||C41, E24, J31, J64|
|Programme Areas:||Labour Economics|
|Link to this Page:||www.cepr.org/active/publications/discussion_papers/dp.php?dpno=2541|
We analyse 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 marginal distributions of unemployment durations as well as wages and benefit levels. Different causes of structural and frictional unemployment are investigated. We investigate the efficiency of the imposition of a single benefit level for all household types and the introduction of an Earned Income Tax Credit.