Unemployment Benefits as a Means for Optimal Redistribution

Per Engström

FinanzArchiv: Public Finance Analysis, 2009, vol. 65, issue 1, 21-36

Abstract: This paper explores the rationale for unemployment benefits as a complement to optimal nonlinear income taxation. We find under plausible assumptions that the optimal unemployment benefits targeted at the low-skilled will be higher than the pure insurance and efficiency purposes would prescribe. The paper thus gives a theoretical justification for using unemployment benefits for redistribution.

Keywords: optimal nonlinear income taxation; unemployment benefits; redistribution (search for similar items in EconPapers)
JEL-codes: H21 J22 J41 J64 (search for similar items in EconPapers)
Date: 2009
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DOI: 10.1628/001522108X444143

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