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http://hdl.handle.net/10419/2803
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| Title: | | Incapacity benefits and employment policy  |
| Authors: | | Orszag, Jonathan Michael Snower, Dennis J. |
| Issue Date: | | 2002 |
| Series/Report no.: | | IZA Discussion paper series 529 |
| Abstract: | | The paper explores the employment implications of allowing people the opportunity of using a portion of their incapacity benefits to provide employment vouchers for employers that hire them. The analysis indicates that introducing this policy could increase employment, raise the incomes of incapacity benefit recipients, and reduce employers? labor costs. The analysis explicitly derives the optimal voucher, i.e. the voucher that maximizes employment at no extra budgetary cost. This voucher is shown to depend on the size of incapacity benefits, the separation rate in the absence of the voucher, and the degree of displacement; but it does not depend on the hiring rate. Numerical calculations show the optimal voucher to be large by the standards of many existing employment subsidies. |
| Subjects: | | incapacity benefits employment policy labor force participation |
| JEL: | | J31 J23 J24 J32 J64 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des IfW IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA) Economists Online
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| dp529.pdf | | 370.93 kB | Adobe PDF |
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