Building Blocks in the Economics of Mandates

John Addison (), C. R. Barrett and Stan Siebert ()
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C. R. Barrett: University of Birmingham

No 2005-16, GEMF Working Papers from GEMF - Faculdade de Economia, Universidade de Coimbra

Abstract: The paper constructs an asymmetric information model to investigate the efficiency and equity cases for government mandated benefits. A mandate can improve workers' insurance, and may also redistribute in favour of more "deserving" workers. The risk is that it may also reduce output. The more diverse are free market contracts – separating the various worker types – the more likely it is that such output effects will on balance serve to reduce welfare. It is shown that adverse effects can be reduced by restricting mandates to larger firms. An alternative to a mandate is direct government provision. We demonstrate that direct government provision has the advantage over mandates of preserving separations.

Keywords: asymmetric information; labour mandates; compensation packages (search for similar items in EconPapers)
JEL-codes: D82 J33 (search for similar items in EconPapers)
Date: Written 2005
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Published in Portuguese Economic Journal, 2006, 5(2), 69-87

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http://gemf.fe.uc.pt/workingpapers/pdf/2005/gemf05_16.pdf (application/pdf)

Related works:
Working Paper: Building Blocks in the Economics of Mandates (2000)
Working Paper: Building Blocks in the Economics of Mandates (2005)
Journal Article: Building blocks in the economics of mandates (2006)
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