Social Insurance and Transition

Andrew Atkeson and Patrick Kehoe

International Economic Review, 1996, vol. 37, issue 2, 377-401

Abstract: The authors study the general equilibrium effects of social insurance on transition in a model in which the process of moving workers from matches in the state sector to new matches in the private sector takes time and involves uncertainty. As might be expected, adding social insurance to an economy without any improves welfare. Contrary to standard intuition, however, adding social insurance may slow transition. The authors show that this result depends crucially on general equilibrium interactions of interest rates and savings under alternative market structures. Copyright 1996 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Date: 1996
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Working Paper: Social insurance and transition (1995)
Working Paper: Social insurance and transition (1995)
Working Paper: Social Insurance and Transition (1993)
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