Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30743
Authors: 
Ek, Susanne
Holmlund, Bertil
Year of Publication: 
2010
Series/Report no.: 
CESifo Working Paper 2920
Abstract: 
The paper develops an equilibrium search and matching model where two-person families as well as singles participate in the labor market. We show that equilibrium entails wage dispersion among equally productive risk-averse workers. Marital status as well as spousal labor market status matter for wage outcomes. In general, employed members of two-person families receive higher wages than employed singles. The model is applied to a welfare analysis of alternative unemployment insurance systems, recognizing the role of spousal employment as a partial substitute for public insurance. The optimal system involves benefit differentiation based on marital status as well as spousal labor market status. Optimal differentiation yields small welfare gains but gives rise to large wage differentials.
Subjects: 
job search
wage bargaining
wage differentials
unemployment
unemployment insurance
JEL: 
J31
J64
J65
Document Type: 
Working Paper

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