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dc.contributor.authorDiTella, Rafaelen_US
dc.contributor.authorMacCulloch, Roberten_US
dc.date.accessioned2010-09-01T09:47:48Z-
dc.date.available2010-09-01T09:47:48Z-
dc.date.issued2000en_US
dc.identifier.urihttp://hdl.handle.net/10419/39555-
dc.description.abstractWe argue that labor market institutions are endogenous. Our analysis focuses on the government's decision to set unemployment benefits in response to an unemployment shock in a simple, reduced-form model of the labor market. It is found that the largest increases in benefits should occur in economies where the adverse incentive effects of benefits are largest. Adjustment costs of changing benefits can introduce hysteresis in benefit setting and unemployment. Both (very) bad and good temporary shocks (including monetary) can permanently reduce unemployment benefits and the unemployment rate. A desirable feature of the model is that the mechanism yielding hysteresis (which requires a concave utility function) ceases to operate when unemployment tends to one.-
dc.language.isoengen_US
dc.publisherZEI Bonnen_US
dc.relation.ispartofseriesZEI working paper B 09-2000en_US
dc.subject.jelJ6-
dc.subject.ddc330en_US
dc.subject.keywordOptimal unemployment benefits-
dc.subject.keywordhysteresis-
dc.subject.keywordnatural rate of unemployment-
dc.subject.stwArbeitslosigkeiten_US
dc.subject.stwArbeitslosenversicherungen_US
dc.subject.stwHysteresisen_US
dc.subject.stwOptimale Besteuerungen_US
dc.subject.stwSchocken_US
dc.subject.stwAnpassungskostenen_US
dc.titleRational institutions yield hysteresisen_US
dc.typeWorking Paperen_US
dc.identifier.ppn320266591en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:zeiwps:B092000-
Appears in Collections:ZEI Working Papers, Zentrum für Europäische Integrationsforschung, Universität Bonn

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