Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/39555
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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 analysisfocuses on the government's decision to set unemployment benefits inresponse to an unemployment shock in a simple, reduced-form model ofthe labor market. It is found that the largest increases in benefits shouldoccur in economies where the adverse incentive effects of benefits arelargest. Adjustment costs of changing benefits can introduce hysteresis inbenefit setting and unemployment. Both (very) bad and good temporaryshocks (including monetary) can permanently reduce unemploymentbenefits and the unemployment rate. A desirable feature of the model isthat the mechanism yielding hysteresis (which requires a concave utilityfunction) ceases to operate when unemployment tends to one.-
dc.language.isoengen_US
dc.publisher|aZEI |cBonnen_US
dc.relation.ispartofseries|aZEI working paper |xB 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.type|aWorking Paperen_US
dc.identifier.ppn824435494en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:zeiwps:B092000-

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