Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/39555 
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dc.contributor.authorDiTella, Rafaelen
dc.contributor.authorMacCulloch, Roberten
dc.date.accessioned2010-09-01T09:47:48Z-
dc.date.available2010-09-01T09:47:48Z-
dc.date.issued2000-
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.en
dc.language.isoengen
dc.publisher|aRheinische Friedrich-Wilhelms-Universität Bonn, Zentrum für Europäische Integrationsforschung (ZEI) |cBonnen
dc.relation.ispartofseries|aZEI Working Paper |xB 09-2000en
dc.subject.jelJ6en
dc.subject.ddc330en
dc.subject.keywordOptimal unemployment benefitsen
dc.subject.keywordhysteresisen
dc.subject.keywordnatural rate of unemploymenten
dc.subject.stwArbeitslosigkeiten
dc.subject.stwArbeitslosenversicherungen
dc.subject.stwHysteresisen
dc.subject.stwOptimale Besteuerungen
dc.subject.stwSchocken
dc.subject.stwAnpassungskostenen
dc.titleRational institutions yield hysteresis-
dc.type|aWorking Paperen
dc.identifier.ppn824435494en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen
dc.identifier.repecRePEc:zbw:zeiwps:B092000en

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