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Unemployment Insurance, Wage Differentials and Unemployment

Michael Braeuninger
Authors registered in the RePEc Author Service: Michael Bräuninger ()

FinanzArchiv: Public Finance Analysis, 2001, vol. 57, issue 4, 485-501

Abstract: The paper explores the relation between wages, wage differentials, and the level and structure of unemployment within a wage bargaining model. There are two types of individuals: skilled and unskilled. The bargained wage of each group depends on the respective replacement rate and determines unemployment rates. Different institutional settings of the unemployment insurance system are considered in a model which includes earnings-related and flat-rate schemes as special cases. Depending on the institutional setting, replacement rates are either exogenous or endogenous. Therefore, shocks may or may not change relevant replacement rates and, thereby may have different effects on unemployment.

JEL-codes: H24 J24 J31 J41 J65 (search for similar items in EconPapers)
Date: 2001
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