Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/69386
Authors: 
Bingley, Paul
Cappellari, Lorenzo
Westergård-Nielsen, Niels C.
Year of Publication: 
2013
Series/Report no.: 
Discussion Paper Series, Forschungsinstitut zur Zukunft der Arbeit 7128
Abstract: 
We investigate the relationship between life cycle wages and individual membership of unemployment insurance schemes in Denmark. We separate permanent from transitory wages and characterise them using membership of unemployment insurance funds. We find that unemployment insurance is associated with lower wage growth heterogeneity over the life cycle and greater wage instability, changing the nature of wage inequality from permanent to transitory. While we are in general unable to formally test for moral hazard against adverse selection into unemployment insurance, robustness checks suggest that moral hazard is the relevant interpretation.
Subjects: 
unemployment insurance
wage dynamics
wage inequality
wage instability
JEL: 
J31
J65
Document Type: 
Working Paper

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