Part-time unemployment and optimal unemployment insurance

Susanne Ek () and Bertil Holmlund ()

International Tax and Public Finance, 2015, vol. 22, issue 2, 223 pages

Abstract: A significant fraction of the labor force consists of employed workers who are part-time unemployed (underemployed) in the sense that they are unable to work as much as they prefer. This paper studies the design of optimal unemployment insurance in an economy with unemployment as well as part-time unemployment. Part-time work provides income insurance and serves as a stepping stone to full-time jobs. Unemployment benefits for part-timers reduce the outflow from part-time work to full-time employment. However, such benefits also increase the outflow from unemployment to part-time work, thereby reducing unemployment. We examine the optimal structure of benefits for unemployed and underemployed workers. The results indicate that there are welfare gains from part-time benefits. Moreover, there are welfare gains associated with time limits for unemployment benefits as well as for part-time benefits. The welfare gains from optimal insurance are larger when wages are fixed than when they are flexible. Copyright Springer Science+Business Media New York 2015

Keywords: Job search; Part-time unemployment; Unemployment insurance; J64; J65 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10797-013-9301-0 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Part-Time Unemployment and Optimal Unemployment Insurance (2011)
Working Paper: Part-Time Unemployment and Optimal Unemployment Insurance (2011)
Working Paper: Part-Time Unemployment and Optimal Unemployment Insurance (2011)
Working Paper: Part-Time Unemployment and Optimal Unemployment Insurance (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:itaxpf:v:22:y:2015:i:2:p:201-223

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10797/PS2

DOI: 10.1007/s10797-013-9301-0

Access Statistics for this article

International Tax and Public Finance is currently edited by Ronald B. Davies and Kimberly Scharf

More articles in International Tax and Public Finance from Springer, International Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().